The Economist might get it wrong again

“Verry shockingue”. The prominent British and internationally leading weekly The Economist has sometimes erred spectacularly. The most prominent error it itself recognizes was its support for the war in Iraq in 2003. A predictable disaster.

The Economist’s cover page this week, dedicated to France’s upcoming presidential election, is entitled: France’s chance: The case for Nicolas Sarkozy. I am afraid that it could be wrong in its assessment again.

I read the leader and agreed on everything The Economist says about France’s problems, the reforms it needs, the stakes in the French presidential election, and the candidates. True, too, the election is a choice between “worst, worse and bad”, as The Economist puts it. But who is the “only” “bad” candidate? I am not sure it is Sarkozy. I disagree with The Economist’s conclusion:

[Nicolas Sarkozy] is the only candidate brave enough to advocate the “rupture” with its past that France needs after so many gloomy years. It has been said that France advances by revolution from time to time but seldom, if ever, manages to reform. Mr Sarkozy offers at least a chance of proving this aphorism wrong.”

The reasons I disagree are related to the realities of French institutions. [The fact that I am not sympathetic to his character and against his ethics is not an issue here, but must be added for reasons of balance/”transparency”].

1) The role of the President in France. In France, despite his immense power, the president has a duty to represent the nation as a whole. As representative of the entire community, Nicolas Sarkozy will have to tone down his aggressive rhetoric on all matters ranging from his so-called economic liberalism to his attitude towards the young people in the recently rioting suburbs. The Economist writes that Sarkozy is a “brutal pragmatist”. Well yes, what he wants is power, and he will compromise with everybody who will help him keep his power once he gets there. Like any of the previous presidents, be it Mitterrand or Chirac, Sarkozy will leave the duty of antagonising the nation to the Prime Minister, removing him as soon as to-be-expected street demonstrations get out of control.

2) In France, reform tends to happen more easily with left-of-centre governments. In France, most structural reforms have been led by left-of centre governments. In the 1980s, Francois Mitterrand did a U-turn in economic policies after two initial years of a financially and economically disastrous fiscal spending spree and a few anachronistic nationalisations. In the late 1990s, socialist Lionel Jospin’s government not only introduced the 35-hour week, it did some advances in economic reform, such as further privatisations, e.g. of France Telecom. He was voted out of power because of these reforms. Even the 35 hours negotiated under the auspices of the social affairs minister of the time, Martine Aubry, were criticised by the left for introducing a greater dose of “flexibility” (e.g. possibility to “annualise” the working hours, leading in fact to workers being forced to work weeks and hours they do not want to, and to take a break when suits the company, not them…) and tight wage restraint. This “flexibility” was one of the reasons for voters abandoning Jospin in the presidential elections of 2002 and allowing him to be overtaken by far-right Jean-Marie Le Pen.

Most entrenched vested interests in France that oppose reform – mainly the labour unions and big parts of the plethoric civil service (more than 20% of the French labour force!), tend to vote on the left. No surprise. The big exception is the agricultural lobby, that opposes reform of the Common Agricultural Policy. It is generally affiliated to the right, and especially to the outgoing president Jacques Chirac, despite vociferous left-wing peasant populist Jose Bove. To show how deeply entrenched the problem is: paradoxically, France is one of Europe’s least unionised countries in Europe, with only 8% of the labour force adhering to a union. But unionisation is strongest, guess where: in the civil service. Also, French law decided in 1966 which are the 5 labour unions considered as “representative” and to be involved in any decisions that a company needs to take in collaboration with the employees. It hasn’t changed since! In fact, many French people despise the labour unions deeply. Simply because people feel very well that they do not represent the majority of the labour force, are out of touch, and are unduly powerful, thanks to the law. … Here is one major nexus of reform that must be tackled. But nobody dares to touch it. Not even Sarkozy.

3) Nicolas Sarkozy will not have enough support, and meet staunch resistance. In France, the only party that could push through reforms would be a left-wing party – the only force that would be able to placate its own supporters, buy them off, and make a better ideological case for “fairness” by facing France’s idealistic civil servant intellecutals (the teachers, i.e., 1 million civil servants!) with a few basic truths. If only the left was really willing to do so. Royal’s “blairophilia” is very superficial. There is no sufficient internal support for reformist stances within the socialist party. There is no prominent academic such as an Anthony Giddens to devise a new strategy on the lines of “the third way”. So indeed there really is not much hope at the moment, and The Economist’s assessment that Royal is the “worst” candidate of all the Big Three is probably right.

Nicolas Sarkozy might outwardly look like a Margaret Thatcher that can ruthlessly push through reforms and set the long-term basis for a new prosperous society, in the disguise of a horribly conservative and socially retrograde character. But he isn’t. Simply because he will not have the power to. Taking the two other main candidates together: already about 45% of French voters are against Sarkozy. Add another odd 10-12% on the far right and the far left respectively, that makes at least 65% of the French voters not supporting Sarkozy. Furthermore, Sarkozy has polarized French society as no candidate has in decades (Mitterrand was a big scare for the right, back in 1981, but he did his u-turn). Any even slightly controversial move he will attempt, will throw crowds onto the streets. Most right-of-centre governments that have attempted classic economic reforms such as social security reform in 1995 or more recently labour market reform targeted at the highly unemployed under-25s was met with the wrath of the street, and led to ultimate failure. Why should Sarkozy escape this fate? Institutionally – Sarkozy will need to deal with the entrenched vested interests who are almost not to be rooted out. And he risks having a relatively strong opposition in parliament that could make life hard for him. The institutional setting in France is not a British-style “elected dictatorship”. Institutional resistance is strong. Sarkozy will want to stay in power and will utlimately compromise. On everything – attitude to immigrants as well as economic reforms. He might well become another Chirac.

I regret that The Economist misses out on all this. It has it right in the text, but it hasn’t got it right in the “flesh”, or the “guts” to really grasp what is happening in France. I might of course be wrong myself. Maybe Sarkozy really has brought about a deep cut with the past and I haven’t grasped it yet. But I don’t actually believe it.

[Today I wanted to finally publish my third post on the EU as part of my current little series, but this French election I had sworn to myself I would not write a single word on before the elections , unfortunately managed to distract me again!. So EU’s priorities will be dealt with another day…].