France’s Battle With Pride

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The New York Sun

After 30 years on the French political stage, Nicolas Sarkozy has finally achieved his goal. On May 6, the French voters elected him president by a large margin over his socialist opponent, Segolene Royal.

Sarko, as friends and foes call him, has promised to lead France toward the future, to break free from unemployment, decreasing standards of living, an aging population, public debt, and daily strikes by government employees. To achieve this victory, he wants to implement free-market ideas. But will he, and, even more importantly, will France?

During the campaign, Mr. Sarkozy committed to rehabilitating work, authority, respect, and meritocracy and touted the slogan, “work more to make more money.” To this end, he proposes to loosen labor regulations and taxes. For instance, he wants tax breaks for people willing to work longer than the official 35-hour week, as well as for the companies that employ them.

He would allow retirees to work without losing their benefits and give tax incentives to college students to get a job rather than live off government subsidies. He wants to make work, rather than unemployment, the most appealing option.

Mr. Sarkozy also wants to introduce some degrees of competition in the school system by progressively moving towards a system that would allow parents to choose the schools to which they send their children rather than having the government make those choices based on mailing addresses. He also favors more freedom in school curricula and opposes the current centralization of school programs.

He has also proposed the elimination of special Social Security treatment for certain employment sectors, an important step that would finally end the unsustainable inequality between public and private sector workers.

However, Mr. Sarkozy is less than consistent when it comes to his other proposals, such as increasing the education budget by more than 50%, spending more money on families, introducing a draft for six months of civil service, and using the euro as a tool to trigger “job creation and economic growth.”

More importantly, Mr. Sarkozy, or anyone else for that matter, won’t be able to implement his program without first reforming France’s powerful labor unions. The unions represent only 8% of French workers but have an influence disproportionate to their size. They routinely paralyze the country — on average there are 17 days a year of strike in public transportation in Paris — without consequences.

Mr. Sarkozy needs to make this reform his priority, but he has said little about ending public subsidies to unions. He has talked about requesting public transportation employees to give a minimum service guarantee, but that is not likely to be enough.

A close look at Mr. Sarkozy’s many years in power leaves little indication that he can avoid the temptations of politics. Mr. Sarkozy has been involved as a politician for more than 30 years. For 20 of those years, he was Jacques Chirac’s double. Some argue that the young Sarkozy only split with Mr. Chirac in 1995 to get his day in the sun.

Since then, he has worked not for government reform, but to lay ground for his successful campaign for the presidency. And he is not afraid to use the public purse to affect his ends. As the minister of the interior, he supplied large public subsidies to Islamic mosques, ostensibly to cut French Muslims from foreign influence, and during his short term as minister of the economy, he used public subsidies to temporarily prevent the moribund Alstom Company from going bankrupt.

He has also often ignored the basic laws of economics, launching a campaign to cut retail food prices by 2% and doing nothing to restrain government spending even in the face of a huge deficit. In order to comply with the 3% public debt cap imposed by the Maastricht Treaty, he discreetly added a civil servant specific pension scheme into the regular pension system, artificially lowering the deficit/GDP ratio.

When he left office, the public debt was going at an ever faster pace than before, and he left all of the 52 million civil servant jobs in the country intact. That Mr. Sarkozy is possibly the most free-market oriented politician in France today says more about the poor state of French politics than about Mr. Sarkozy himself.

The gap between his words and his actions reinforces the idea that he is likely to do little reform in a country whose people have little interest in giving up their entitlements.

In the 1990s, the former president of France, François Mitterrand, said, “We have tried everything against unemployment.” And so he had, except work.

Mr. Sarkozy has vowed to try everything to restore French pride. Let’s hope this is one battle in which the French don’t surrender.

Ms. de Rugy is a senior research fellow at the Mercatus Center at George Mason University.


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