Tuesday, September 21, 2010

French social reform


Some changes are easier to ring than others. Europe has changed immensely in the past 20 years with landmark events such as the felling of the Berlin Wall and the integration of East and Western societies; and single European currency in most places; and the agreement to steadily sweep away the archaic support regimes for its farmers.
When the fast-talking and snappy-dressing French President Nikolai Sarkozy swept into power and picked one of Mick Jagger’s ex-girlfriends as First Squeeze, he promised to revitalise France. Sarkozy pledged to sweep through a reformist agenda that would do whatever it needed to ensure the French could keep the lifestyles they deserved. That warmed French hearts as they entered ballot boxes but since then his star has fallen as the rubber has hit the road on putting those promises into action, and he has delivered little.
The maverick Sarkozy now feels anything but cosy after national rolling protests against his government pushing through radical laws to change what may have threatened the values of society. What horrible thing has he inflicted on his people? He has dared lift the retirement age in France from 60 to 62, and push the age for full pension entitlement to 67! In essence, he has told the French they have to work more, which is one of the most dangerous things anyone can say to those collective masses - a deeply socialist culture that preciously holds onto cradle-to-grave welfare as an absolute right in being French. Governments have fallen in the past for far weaker reform than this.
Polls and surveys are misleading at the best of times but the French are specialists at creating confusion for anyone in authority – 53% of French think the proposals are “acceptable” but 70% support protests against the changes. This seems to make sense but don’t think that denies them the right to gather behind banners and throw rocks at police and government buildings. But the French ARE different and need much more cotton wool around them as they age gracefully.
It matters not that the average retirement age for the developed world is 66, or that this catches the French up with its big Euro-neighbours.
The trouble with France and with a few other countries in Europe in the post-GFC era, is that they can’t fund their social structures caused by aging populations and endemic unemployment. France has to change something big as it has an underfunded state pension (the equivalent of superannuation) to the tune of €42 billion (about A$60 billion) by 2018, high unemployment, a major social problem with cities of unwanted illegal immigrants and economic growth that looks like flagging while the rest of the big players in Europe can see the way to brighter times.
What’s this all got to do with us? Europe has long been debating how it shifts its money from funding unviable farmers towards more positive uses, and governments look to save cash to fund the black holes that have emerged in their coffers. The French will be the last to accept any such change but the longer they dither over bigger problems, the easier it will be for the European Commission to glide the remainder of farm reform past them like a quiet ship in the night.

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