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wishes, our inclinations, or the dictates of our passions, they cannot alter the state of facts and evidence." - John Adams - |
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Posted on 10/12/2003 4:25:50 PM PDT by Ex-Dem
France in a bleak mood
Unemployment, constant public strikes and marginalisation in EU and the world have dented the morale of the French
By
PARIS - From record unemployment to a chronic budgetary deficit, France's economic woes are taking a toll on the morale of the French.
France is increasingly painted as a country which is not only failing to make the grade internationally, but seems hell bent on continuing in that downward spiral.
A recent editorial in Le Figaro declared: 'French morale is in its socks.'
Mr Yves Threard wrote: 'It suffices to see that conversations in Paris constantly revolve around the question of whether our country is really on the path of decline, that all the doubts become apparent.'
The wave of negativity about the performance and future of the country has been dubbed 'Francopessimisme'.
The polemic on the great decline, according to the daily Le Monde, began with a publication last month by the European Commission.
It said France had lost its top rank within the European Union, with its economy sliding from third to 10th place among the 15 member states in the past decade.
Official data published on Thursday showed that gross domestic product will expand by only 0.2 per cent this year - the least in a decade and less than half the 0.5 per cent growth forecast in the budget.
That will add to pressures on the budgetary deficit.
At 4 per cent of gross domestic product, it is already one percentage point above the limit set for the eurozone.
Unemployment, meanwhile, is hovering at 10 per cent, with hundreds of thousands of more jobs at risk.
The decline has been apparent for some time.
The World Economic Forum (WEF) relegated France in November last year to the lowly position of 30th most competitive economy in the world - a drop of 10 spots in one year alone.
French lawyer, economist and historian Nicolas Baverez, in an essay entitled France is Falling, suggested that the social and economic degradation had been building up over at least 20 years.
'Since the 1970s the average growth in France has fallen from 3 per cent to 1.8 per cent a year and productivity gains from 4.2 per cent to 1 per cent annually,' he noted.
He said France was the only developed country where unemployment rates had stayed at around 9 per cent for a quarter of a century and where 20 per cent of the working age population were excluded from the workforce.
How did France get into such dire straits?
Mr Baverez pointed to an inability to adapt to modern realities and the global economy.
The WEF highlighted 'infernal social regulations, repetitive strikes, and a debilitating fiscal system which hinder the competitiveness of French enterprises'.
The problem is often linked to heavily-taxed businesses, inflexible labour laws and a very costly but inefficient public sector, which employs one in four workers.
Thirty per cent of state workers are unionised and there is a strike nearly every month in public sectors.
Some blame the 35-hour work week for aggravating the productivity problem and generating a non-enterprising and anti-innovative mentality.
It is also costly - with 13.7 billion euros (S$27 billion) needed since 1999 to subsidise the work reduction and job creation.
The budget is also constrained by increasingly unaffordable pension, health-care and welfare systems.
Structural reforms and changes in public sector spending are seen as a priority, but promised overhauls are slow in coming.
All this has led to a loss of confidence in the country.
The Medef employers' body said there is now less foreign direct investment than 10 years ago.
And only one in two foreign companies expected to expand its French operations, while one in four is considering relocating.
French companies, too, are moving abroad.
And factories and jobs are on the go.
Experts warn that the French decline is not limited to the economic malaise.
It shows in the dysfunctions of the public service and government system, political and business scandals, the rise of extremist parties and the marginalisation of France in Europe and in the world, due partly to its stance on Iraq and defiant violations of its financial obligations in the EU.
Domestically, the people's morale has also been punctured by the economic crisis.
Mr Georges Valance, the editorial director of the economic magazine L'Expansion, linked the psychological impact to the rising political alienation of voters, who feel nobody in power is able to reverse the 'humiliation' of a powerful state in decline.
Mr Yvon Jacob, president of the Federation of Mechanical Industries, said the only way out was to adapt at full speed.
'Otherwise the French economy will find itself stuck in a formidable vice, between the emerging economies which are gobbling up unceasingly the market shares, and the super-power of America, which is the world leader of innovation,' he said.
Sliding economy
Bloated bureaucracy
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wishes, our inclinations, or the dictates of our passions, they cannot alter the state of facts and evidence." - John Adams - |
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