Wednesday, 28 February 2007

Presidentielle 2007 - French vs UK Social Models

“On a more serious note I know their social model doesn't bring as much economic growth as ours and leads to even more bureaucracy than ours, but the Anglo-Saxon model does seem to be at the expense of unhappy social divisiveness. I am not sure the extra material wealth is worth it.

I am very interested in politics, although I have never joined a political party. My interest gets more intense around election times and I must apologize in advance if you think that some of my remarks are excessive. I should stress that my negativity in what follows, towards the French socialists, does not extend to New Labour who are more realistic. (Although I did once say that I would leave the UK if Gordon Brown ever came to power, but in the end I anticipated that event by a couple of years). Here New Labour would be considered right wingers who pursue “liberal” economic policies. (“Liberal” is a real dirty word here, it’s time to invent a new one).

The problem with the comparison of the French and Anglo Saxon social models is that it is implied that they are alternatives. I believe that to be false, because the French system does not deliver greater overall contentedness and less social divisiveness.

In France the overall unemployment rate is in excess of 8% but in the banlieu, amongst the youth of immigrant families, it is more than double this. The riots of last year were, I think, due to a feeling of hopelessness amongst the youth who cannot see a future for themselves. In general there is a national feeling of malaise, a lack of confidence in the future and a real lack of opportunities for the young and the seniors (that means anyone over fifty). We have been through similar periods in the UK.

The French are also aware that their disposable income is falling year on year. Companies are using the fear of unemployment to keep wage increases lower than inflation, whilst at the same time the Social Charges have increased, and so people have less money to spend. (Because of the Jospin 35hr maximum working week you are not allowed to work longer and get paid for it if you are salaried).

There is considerable agreement on what is wrong with France, and what’s more they all say they want change but, of course, they don’t agree on what and how. They also seem to realize that another swing of the pendulum from right to left will not deliver what they want, hence the current interest in the centre candidate Francois Bayrou (UDF).

I find it strange that the French are all aware that their overall taxation rates are among the highest in Europe but they are not clamouring for them to be reduced, just saying they are too high and then quietly working on the black.

As an example of the total tax take I will quote Christiane’s niece, who is a 40 year old single mother, qualified as a speech therapist. She told me that as a member of the "professions liberales" the total deductions from every invoice she puts in are 77%. She is not a high earner, because the rates she can charge are limited by the state. As an artisan my deductions would have been about 15% lower, (unless I employed someone, when I would then also have to pay a 15% tax on my professional assets each year). Yes that’s right; they have different social charges for different professions, and different pension rates and also different employment laws! Mad!

The left is very strong in France. There are actively supported communist and extreme left candidates whose ideas get significant air time and weigh quite heavily on the Socialist Party (PS). The left in France believe fervently in Social Justice and the redistribution of wealth but have very few suggestions to help in the process of creating wealth to then redistribute. In fact the creation of wealth comes very low on their list of priorities. In their philosophy profits should be given first to the workers and then what’s left to the shareholders. Although they cite mondialisation as a reason for all their problems, they don’t really accept that we all live in a world market economy where investment capital will flow towards the best conditions for making a profit. In fact they hardly mention investment at all, except in terms of training and research. Their instinct is to protect what they have, subsidise individuals and reject change.

I will give an example. Everyone in France is afraid of “delocalization”, in other words, closing French factories and relocating to Asia or Eastern Europe. So Segolene’s policy is to adjust the corporate tax system to penalize companies which re-locate. But the PS does not stop to think whether this will affect the decisions of foreign companies concerning where to invest new capital. I believe that this policy would lead to a progressive decline in the competitivity of French companies as a result of under-investment. In 21st century Europe it is not possible to live behind a wall of protectionism and exchange controls, and thus try to prevent businesses from making rational investment decisions. Bizarrely this policy is promoted by both the extreme right and the extreme left.

Another example is the PS’ idea to re-launch growth in the economy by using an increase in the minimum wage (SMIC) to 1,500 euros/month as against 1,254 currently, a 20% increase. This is after it has already risen 18% in the last 5 years, much faster than salaries. They don’t stop to ask where the money will come from in businesses using low paid workers, or concern themselves about whether it would lead to some businesses becoming unprofitable and closing, or others deciding not to even start up. (Somehow it will promote growth in the economy which sounds a bit like printing money to me). An economist has called it “le Smicardisation de l’emploi”!

I can’t decide whether these highly intelligent people, who are better educated than me, really can’t foresee the next logical consequence of their flawed policies, or whether they are perpetrating a conspiracy to fool naïve electors?

The right (Sarkozy UMP) also believes in Social Justice (they are above all French) but their analysis of what is wrong (low investment, low competitivity, low levels of innovation) inclines them towards helping businesses to create wealth and this makes people suspicious because they don’t generally believe that the wealth will come to them but that it will go to the (foreign) shareholders.

In general I am not particularly impressed by Sarkozy, who is struggling to overcome his Rambo act last year when, as interior minister, he started talking zero tolerance on delinquents and cracking down on immigration. He also has the disadvantage of still being part of the existing UMP government which has made the usual mistakes and not delivered very much of consequence.

In my opinion, neither Nicholas Sarkozy nor Segolene Royal, thus far in the campaign, has demonstrated any of the necessary grasp of foreign policy, which is a French President’s direct responsibility. I expect you heard about Royal’s gaffes over Quebec and Corsica, but these are long forgotten now. Who was it who said a week is a long time in politics?

I will be bold and make some predictions. If the right win the Presidency and the Assembly, then after some months they will run into trouble with the unions who, supported by the left, will challenge a key policy, probably to do with limiting union power. France will descend into the streets, and grind to a halt, until the government withdraws to lick its wounds. (French governments always back down against popular opinion; remember the attempt to introduce a new form of employment contract, the CPE). The Prime Minister will be changed and no further serious reform will be attempted. During the rest of their five year term, France will continue to decline relative to its European neighbours.

I have not spoken much about Bayrou, who presents the French with an alternative because he proposes a broad Left-Right coalition, citing Germany as a successful example. He has a problem because his UDF party is traditionally right of centre, but he does have the appeal of avoiding another swing of the pendulum and his coalition approach is his only serious way of distinguishing himself from the other parties. Personally I dislike coalitions, unless they are forced by circumstances they are unlikely to hold together for very long and usually lead to weak governments. To propose it as a policy objective seems to me to be politically naïve. If he wins the Presidency, (which at the moment looks unlikely) then a wishy-washy set of policies will be introduced, which tinker with the margins of the problems, whilst more radical propositions will be discarded, because they will not receive a majority of votes. In this way he will avoid the revolution in the streets but, although it could be amusing to watch the Left - Right juggling act, it would not seriously change anything, and again France will continue to decline relative to its European neighbours.

If the left win they will introduce their very protectionist, business unfriendly, policies without complaint from anybody who matters politically, and quietly foreign investment will dry up and French companies will transfer their assets overseas. At the end of five years unemployment will be higher and disposable incomes lower. Taxes will also be higher, discouraging initiative even further. If they are unlucky there will be a downturn in the world economy which will make things worse. In this scenario the crisis will come from further rioting in the banlieu and to deal with that they will try to create unreal jobs with borrowed money. (Sounds familiar doesn’t it)? It is possible that after this a realization might emerge that change in the other direction is imperative. In a Machiavellian sort of way this could be the best way of achieving the necessary change in France.

So you can see that France like the UK is divided politically and I believe that it will struggle to live up to its political ambitions either right or left. The resulting lower growth will bring more social division and lack of opportunity, and the brightest young people and entrepreneurs will leave France.

The polls are currently showing Royal and Sarkozy level on 28/29% and Bayrou at 17%, with Sarkozy winning narrowly on the second round. Whichever way they vote, France is going to go through worse times in the next five years than it is currently and maybe it’s a good thing that we have a UK based income and don’t live in a city!

Sunday, 25 February 2007

Presidentielle 2007 - Brits for France

The Five Propositions - Les Cinq Propositions

You may have heard about Segolene Royal’s 100 propositions, the fruit of a process of consulting the people who, of course, were quick to ask her for what they wanted. Even Christiane, a life long socialist, is shocked by some of the policy ideas, such as the “Sécurité Sociale Professionnelle” under which, if you were made redundant, you would have the right to 90% of your salary until you find another job. (One could ask “why would you bother”?) When you do find another job, you would have the right to the same salary and other accumulated rights such as pensions. This idea was originally proposed by the CGT union and has been taken seriously and adopted in different forms by the leading candidates of the left, centre and right.

I have been thinking that when Sego consulted the people, British expats, were not represented. This may well be because they can’t speak French, nor can they vote, but nevertheless, in the interests of social cohesion (la Lutte Contre l’Exclusion), Égalité and in the spirit of La Solidarité Européen, we should have been asked for our views. I have decided that the only way to redress this situation is to form a political pressure group and contribute to the debate.
It would take too long to prepare 100 propositions and, like Segolene’s, nobody would read them anyway, so I will restrict myself to the local Brits’ “five most wanted” and then use my influence to get them heard by the people that matter. Since my last communication from the Chateau des Anglais, I have also decided to adopt a more modern style and suppress my natural authoritarian instincts as Lord of Autoire and Bretenoux. In this way I hope to get more support from the common people.

Proposition 1
France has a problem of economic growth, which at 2% is the lowest in the EU apart from Portugal. If foreign businesses do not find France an attractive place to invest in, this is certainly not true of Europeans in general and Brits in particular. So:- “All capital imported, by expatriates now resident in France, and spent in France, will attract a government grant of 90% of the sum imported and spent”. The grant will be paid annually through the tax system and should be very easy to administer. In this way foreign money will be encouraged into France which will help to re-launch the economy and finance other policies.

Proposition 2
The French wine industry is not doing very well, which is rather surprising because you can only buy French wines here, but it needs a boost and the government should intervene so:-
“All French wines bought for local consumption will attract a subsidy of 75%”. This could have been complex to administer but, fortunately, there is already an existing mechanism, so I propose to introduce a modification to the Carte Vitale. You would present this at your supermarket checkout, where the tills would be equipped to register your purchase with the Sécurité Sociale, which would then reimburse you in the normal way, directly into your bank account. If you were worried that you might suddenly have a lot of visitors, or go through a stressful time thereby causing your consumption of wine to increase, the insurance companies could offer an “Assurance Vinicole” which would reimburse the 25% not paid by the Sécu. This policy should be a real vote winner, popular with both locals and expats.

Proposition 3
To help solve the problem of unemployment, and also to encourage more French youngsters (who may find the prospect of the administration of a business in the French system somewhat daunting) to aspire to become artisans I propose:-
“Work done, on an expatriate’s principal residence by local registered artisans will attract a 100% subsidy”. This will be paid directly to the artisan, via the existing system used to collect social charges. In this way artisans will be paid soon after they prepare their invoices and expats will be saved the trouble of checking invoices months later in a foreign language. This policy is designed to attract more foreign money into France, again helping economic growth. I believe a secret unofficial pilot version of this scheme is already in operation here, since sometimes we never get bills for work done.

Proposition 4
“After two years residency in France, expats would have the right to buy their favourite imported foreign delicacies (such as HP Sauce, Branston Pickle, Hobnobs, Marmite and 450mm wide tinfoil) at a VAT rate of zero”. To make this policy more palatable to locals it would be conditional on expats a) being retired and therefore not taking jobs from French people and b) on a reciprocal agreement being set up with other EU countries on a nation by nation basis. I know that there are many French people living in London who miss their Ricoré, paté de tête, rillettes and fritons very much, so they would be sure to vote for presidential candidates who adopted this proposition.

Proposition 5
And finally a policy, which will not be generally popular, but could be sold as being; good for the environment, good for the health of the nation, as well as making a start on reducing the hole in the finances of the Sécurité Sociale.
“A tax will be introduced on all carrier bags used in pharmacies”.

I believe that this contribution to the presidential campaign is built on the solid foundations of the French Model of Social Democracy, a tradition with its roots in the revolution of 1789. But it is also looking to the future, since it addresses the needs of both France and its growing expat community. When these propositions are adopted, they will not only have far reaching effects on growth and employment in France, but will also promote Solidarité and Fraternité between our communities.

Saturday, 3 February 2007

Le Chateau des Anglais

Near us in Autoire, “Un des Plus Beaux Villages de France”, we often walk up the valley, which is surrounded by cliffs, and back down via the Chateau des Anglais. This is really more like a ruined defensive wall, perched halfway up the cliffs under an overhanging rock, than a castle. It was a place of refuge for the English mercenaries who occupied the valley during the hundred years war in the 13th century.

It occurred to me yesterday that, since I am English, I could be descended from the original owners of the castle and that I might have some legal rights concerning it. This is doubly possible because my mother has always said that I have Huguenot ancestry from the French Protestants who settled in Clerkenwell in the 17th century.

Perhaps, like David Beckham in his contracts, I might have rights to the use of images of my castle. Or perhaps I should hold a fête there once a year, to celebrate the building of the castle and it’s Englishness. Since the French love a fête, and any excuse is good enough, this should not be too controversial. But first, in the interests of politeness, it would be necessary to inform the Maire. You can perhaps imagine the scene should I foolishly succumb to my delusions of nobility. . . . . . . . . . . .

I arrive at the Mairie in my 4WD warhorse, scattering the peasants in the streets of Autoire on the way.

“Bonjour Monsieur le Maire, I am Lord Preedy and I would like to inform you that I am going to hold a fête in my castle each year on 16th April”.

“Excuse me, I don’t understand, which castle”?

“The Chateau des Anglais of course. I am English and I claim the ownership of my chateau. I am going to hold a fête in the castle to celebrate the victories of my English ancestors in the 13th century”.

“Perhaps you would like to join our “comite des fêtes” and propose the idea to them? They are always looking for new members”. Says the Maire, thinking that this might get rid of me.

“Oh no! It would be inappropriate for the Lord to attend a village committee but I would be pleased to receive them at my castle”.

“Ah”, he says, “That could present some difficulties for the older committee members; they would have trouble climbing up there”!

“Worry not. I am in alliance with Lord Malcolm of the Gers and he has powerful engines, driven by steam, one of which we could put on the top of the cliffs and lower down a basket on a cable for the older ones”.

“Do you have insurance for that”? Says the Maire. “Come to think of it the castle isn’t very safe either. It would be unlikely to pass an inspection for social events”.

“ Insurance? I know nothing of insurance, but an Inspector you say! Does he work for Queen Elizabeth? Does he have daughters? If he doesn’t co-operate I will reintroduce the Droit de Seigneur”.

“He works for the Prefecture in Cahors and they are very strict about public safety”!

“The Prefecture! This must be some new institution that the Queen has introduced. The internet is so slow here! Last year I discovered that three years ago she granted me the monopoly on the importation to England of walnuts, foie gras and cassoulet! But, forsooth 'tis true that 'tis draughty up there. I will send my lieutenant and a few of the guard to conscript some of the local maçons. In a month or two they would rebuild it like new, with the right sort of incentives”.

Ah, so you will need the forms for a “Permis de Construire” and a “Declaration de Travaux! Will you be installing a septic tank”?