2016 12 – News From France

Froggy

Another surprise

After Brexit and Trump, Fillon. 

François Fillon was unexpectedly elected presidential candidate in the primaries of the Sarkozy party Les Républicains. He gathered 44% of the votes, Juppé 28% and Sarkozy 20%.  Four million took part in the vote, and that included 15% ‘left wingers.’ There will be a second round on Sunday 27 November. What accounts for his election?

He is different from the other candidates in that he is not ‘trendy’; he presents himself to the media with long speeches rather than soundbites.  He has a slow and serious image. (Well ‘slow’ is not quite the right word, since his hobby is car racing. His grand-father was a car mechanic at Le Mans race course. This makes him not quite part of the upper classes. He also only attended university, not the prestige establishments like ENA, the Oxbridge of the French political class.) His private and financial affairs are in order. He is not the mayor of a large city, like his rival Alain Juppé, mayor of Bordeaux. He was only mayor of a village, and could not win an MP seat where he lives in the provinces; he is now MP of a Paris arrondissement.

He is different in that he wants to distance France from the United States; he finds it intolerable that the US oversee all transactions made in dollars worldwide, and that Europe depends on the US for military security. He regrets France following the US in their interventions in the Middle East, and thus losing its reputation for independence. Being friends with the US does not mean being their vassals, he said.

Fillon wants a rapprochement with Russia. Sanctions do nothing for France but damage French agriculture, and France needs Russia as an ally against Islamic State. In December 2014 Froggy wrote:

“There is an important pro-Russian current among French politicians at top level.”

Le Monde newspaper is anti-Putin. As part of a series of articles entitled ‘Putin’s French networks’ it listed politicians who support Putin and that included Fillon. Sarkozy himself addressed a public meeting in November 2014, saying France must deliver the Mistral helicopter-carriers Russia ordered in 2010. Both Fillon and Sarkozy met Putin personally and that seems to have made a big difference. The National Assembly has a Franco-Russian friendship society, with 66 members, 2/3 of which are UMP.  [UMP is the previous name of Les Républicains.]”

For Fillon Russia is part of Europe and it must be treated as such in order to strengthen the continent.  Unlike Fillon, Juppé, his nearest rival, still wants Russia to surrender Crimea, still wants regime change in Syria, still wants to refuse to have friendly relations with Iran, because ‘Iran supports Hezbollah which threatens Israel’.

As far as the EU is concerned, Fillon wants the Eurozone governed by a Directoire of the main states involved, working for fiscal harmonisation and overseeing the European Central Bank. He is a social ‘reactionary’.  He would reverse anti-family laws passed by the Socialists and reinstate universal child benefit and universal tax rebate for children (Socialists had made those means tested). He voted against same sex marriage, and made clear that, while he would not reverse the law, he would be vigilant that surrogacy/medically assisted procreation would be not available for same sex couples.

 

The economy

Fillon wants a French capitalism, that invests in France and for France.  His solution is to make life more attractive for investors. He will cut the tax on wealth (Impôt de Solidarité sur la Fortune). He will have a fixed 30% tax on capital. He will increase the fiscal income of the State by putting VAT up 2 points, and will reduce public expenditure by putting a cap on unemployment benefit and reducing its amount over time; by cutting the number of public sector employees by 500,000 over 5 years by making them work longer hours and not replacing leavers (an 8% reduction over 5 years). In general, people will be asked to work 39 hours when they worked 35, for the same wage.(This last measure proves that the 35 hour week did successfully reduce unemployment, since increasing hours is going to reduce the overall number employed.)

In fact, under Fillon the Labour Code would not legislate on the length of the working week: the European maximum of 48 hours will be the only official limit. Management and employees will negotiate hours, and the status quo of 35 hours can be maintained. He will put retirement age at 65 for all, regardless of the nature of the job done; if the job is too heavy and onerous after 50, then a different post should be sought.

In case of disagreement between management and employees, a referendum will be organised at the place of work. Regarding youth unemployment, Fillon wants to cut subsidised youth jobs and replace them with improved apprenticeships. The minimum age for ‘auto-entrepreneurs’ will be lowered to 16. Generally Fillon wants a flexible labour force, with easier redundancies and more so-called ‘self-employed’.

 

The French are better than they think they are.

Fillon, a Thatcherite, looks enviously across the Channel, at England’s supposedly lower unemployment figures. He can see multinationals settling in London, attracted by lower corporate tax and easier sacking procedures, and able to poach productive talented French young people, educated and trained at the expense of the French taxpayer. But is this what he sees?

He does not see that the French have precious qualities which may not be there forever. He does not see that his homegrown workers are productive, and appreciated in England, thanks to the French social and education system and the French labour protection laws. Since he admires the English, he should read Anthony Hilton in the Evening Standard (8Nov2016), who writes, under the headline:” “Britain has a lamentable productivity record — the growth in value added per hour worked is one of the slowest and poorest among developed nations.”: “There is a strong link between productivity, profit growth and the maintenance and development of workers’ rights.

Research published last month by the Centre for Business Research in Cambridge and the Global Development Institute at Manchester University [more English science! Fr.] turns conventional wisdom on its head and reveals that improvements in labour rights can lead to increased productivity and employment, as well as greater equality in society, which is another source of economic growth. The research looks at changes in labour laws across 117 countries over 44 years, so it is comprehensive.

MPs [and Fillon] pressing for reduced labour rights might also take note of a speech three or so years ago by Andy Haldane, currently chief economist at the Bank of England. Focusing on the psychological state of employees and their efficiency, he made the point that employees who are worried about job security or whether they can make ends meet are not going to perform at their best. Employees on zero hours contracts or some other form of part-time work may feel so insecure they can’t do the job properly. That being the case, the more you cut back on workers’ rights in the short term, the more long-term damage you do to output and productivity.

Finally, those wishing to scrap our labour laws should note the recent private comment of an FTSE 100 chairman. He said our flexible labour laws make British managements lazy and unimaginative because they can respond to every setback by sacking people to cut costs. In Germany, they can’t do that, so they have to devise ways to grow themselves out of trouble.”

 

Fillon-Le Pen?

But Fillon is launching a liberal program, and is not going to listen to these words of advice. He wants to bypass the unions (by such measures as allowing non union members to stand as staff representatives) but may well become involved in big confrontations. Thatcher was able to bribe people into accepting her liberal agenda, with the sale of council houses and the lure of ‘entrepreneurship’. This won’t be available to Fillon. Indeed he is proposing ‘a big effort’ for the renewal of France.

If Fillon finds himself on the second round of the presidential elections in 2017 against Marine Le Pen, she will be able to attack him on two weak points. The first is that he is for Europe, and Europe is not popular, and the second is his liberal economic agenda; she will not have such a liberal anti-worker program. Not only are these liberal economic measures counterproductive, as they diminish worker productivity as outlined above, but they will make Fillon unpopular as a candidate, and give Marine Le Pen an edge over him.

Juppé warned Fillon that he was going too far too fast; losing 500,000 public sector workers over 5 years means no new nurses/police/teachers appointed in that time. Paying people for 35 hours while they work 39 is unacceptable. Fillon knows this, but he wants to ‘casser la baraque’, something like ‘cause an explosion’ as well as ‘bring the house down.’ It is perhaps this excessive attitude that explains his sudden popularity. A lot of people are in the mood for a big change.

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