05-09-2007

SARKOZY ONLY HAS HALF THE SOLUTION FOR FRANCE; FRENCH ELECTION COULD LEAD TO RESURGENCE OF EUROPE

Anthony Giddens, the celebrated sociologist who formerly headed the London School of Economics, is the intellectual author of the "third way" policies introduced by British Prime Minister Tony Blair.

By Anthony Giddens

LONDON — It would be impossible to deny that the problems facing France are grave, and that they are structural — small-scale tinkering won’t begin to deal with them.

France’s unemployment rate is nudging 10 percent, and this figure excludes the large numbers of people who have retired and who have to be paid for by the younger generation. Public debt has built up from 20 percent of GDP in 1980 to 66 percent today.

About a quarter of people under 30 in France have never held a full-time job. No wonder the newspapers are full of stories about young people fleeing France to work abroad. There are 400,000 French expatriates living in London alone — the equivalent of one of France’s large cities.

Following the “no” vote in the constitutional referendum, French influence in the EU has dipped sharply.

President-elect Nicolas Sarkozy is well aware of these issues. The problem is that his program offers only half of what France needs.

Sarkozy says that France is too resistant to change and concentrates too much upon protecting existing perks and privileges. Pointing to the fact that France is falling behind other nations in terms of economic success, he argues that the country has done too little to encourage initiative and entrepreneurial activity.

He distinguishes three main ways in which, on an economic level, the country must break with its past policies and programs.

First, it must be recognized that wealth has to be created before it can be distributed. The rigid labor laws in France discourage business start-ups and the flexibility needed to adjust to rapid technological change. A levy, for example, is imposed upon any firm that makes anyone over 45 redundant.

Second, overspending by the state must be brought down and public finances put in order.

Third, the free market should be regarded as a friend rather than an enemy whose influence is to be limited at all costs.

What’s wrong with these remedies? Nothing: They are exactly what France needs. It is the other half of Sarkozy’s program that is wholly inadequate. He has little interest in social justice or the limiting of inequality. Social protection will take second place.

France has massive ethnic inequalities. What was Sarkozy’s response to the riots of 2005 in the minority neighborhoods? Famously, he dismissed the rioters as “scum.” His mixture of free markets and hard-line law and order policies add up to a brittle combination indeed.

As he forms his government, Sarkozy might well take some pages from his electoral opponent, Segolene Royal, whose proposals focused on social protection, such as increasing the minimum wage, providing interest-free loans to young people and increasing benefits for the disabled.

A good sign of Sarkozy’s possible open-mindedness are his ideas of “positive discrimination” for minorities, akin to affirmative action in the United States.

Still, the prospects for France look worrying. Economic growth and job creation are vital for the country’s future. Let’s hope that Sarkozy sees that these are not inconsistent with social justice, but on the contrary are the condition of pursuing it.

A final note. One result of the French election is that the German, French and British leadership (by which I mean now Gordon Brown) should be able to work well together on many things, and that could lead to a resurgence of Europe.

The German government is a coalition in which the social democrats still play some part. So it isn't simply “on the right.” Brown is likely to give more attention than Sarkozy to continuing to beef up public services and reduce inequalities, as a good social democrat should. But there are certainly many issues today that don't break down easily into a left/right division — climate change, energy security, coping with crime — on which Europe can now find common ground.

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