To those of us who understand British politics, France seems rather like our own country before the Thatcher revolution. The unions hold tremendous sway. Governments are easily cowed by protests. Above all, there is a notion, driven by organised labour but subscribed to by most of the population, that there is a bottomless pit of money out of which all will readily, and ungrudgingly, be supplied.
This mentality lies behind the sense of grievance, manifested in particular by the French socialist party and their confrères in the unions, about the notion of lifting the retirement age to 62. France, like all other Western economies, is short of money. Even if there had not been a global financial crisis, France would still – again like all advanced nations – be facing the problem of what to do with an ageing population. Someone who retires at 55, as used to be the norm in many parts of Europe, may now have longer in retirement than he or she had in work. State pensions systems cannot cope with this. France is no exception.
In Britain, the problem of what to do with a growing number of people making demands on a state funded largely by a shrinking workforce has been to raise the retirement age. First, Britain broached the question of equalising the retirement age at 65 between men and women: this is being done by increments. Then it was announced that the retirement age would rise first to 66, then to 67. That this has been accepted with a shrug of the shoulders – something the French are supposed to have perfected – rather than with riots perhaps says something about the lack of militancy among the British people compared with the French: or, perhaps, it suggests a greater sense of realism about how bad things are.
When the British introduced a state retirement pension, in 1908, the average Briton was dead before he claimed it. Now, in Britain as in France, the retired claim the state pension for decades. In France, only about 48 per cent of people in work pay income tax. This means the burden of funding the pension, and all other public services, is falling on a disproportionately small section of the productive population. This is unfair and unsustainable, and demands a reality check.
President Sarkozy is trying to give his country just that, but it remains to be seen how far he will succeed. I went around France during his election campaign in the spring of 2007 and was struck by how many people seemed to be impressed with his promises of reform. He managed to present an image that was as different from that of his socialist rival, Ségolène Royal, as it was from that of his predecessor, Jacques Chirac. Chirac was very much in that mould of French president inaugurated by de Gaulle: he sought to unite the country, even if he had to bribe a large number of people with taxpayers’ money in order to do it. Sarkozy was determined to bring France into the 21st century.
The omens were, however, not good. Dominique de Villepin’s attempts, in 2006, to reform employment law for those entering the jobs market for the first time in order to make it easier to sack somebody caused riots, and were withdrawn. Villepin was not trying to provoke an orgy of sackings: he took the view, quite rightly, that if employers could more easily undo mistakes they had made in hiring sub-standard staff, they might be tempted to take on more people. He tried to explain his reasoning but, in a country determined to be suffocated by a welfare state, it fell on deaf ears.
So when Sarkozy, shortly after his election, asked the socialist politician Jacques Attali to come up with deregulatory measures that would make France more competitive and more open for business, one looked at the prospect with foreboding. Attali brought in 316 suggestions: I am not sure any of any significance has ever been implemented. Sarkozy welcomed them and promised to set about them with enthusiasm. He began by addressing the question of the Paris taxi service: the city had fewer licensed cabs than in 1924. A paralysing strike by taxi drivers showed Sarkozy who was boss. That was the beginning, and the end, of attempts at serious reform.
France is in a dangerous position, for if it does not accept measures such as an economically realistic retirement age, and other cost-cutting measures to see it through the present crisis, then it will soon be in serious trouble, joining other major European economies such as Spain and Italy, and minor ones such as Greece and Ireland, on the road to penury. It is unclear how long the euro can continue being so strong an international currency when so many of the constituent national economies of the eurozone are either basket cases, or heading there. But so long as it is, France is having to sell expensive goods abroad in order to make a living, and this is not easy. If a big devaluation – which French ministers have been praying for for the past two years – does not come, then the only alternative is for France to stop living so wildly beyond its means.
It may be, by the time you read this, that the days of strikes, and the fuel blockade, and protests by lycéens have come to nothing, and Sarkozy has faced down the organised left and has won. By winning, I mean he has made his point that France must tighten its belt and can no longer subsidise its people so unrealistically. However, even if he does that, he will leave a legacy of disunity and resentment that may yet undo him in 2012.
Simon Heffer is associate editor of The Daily Telegraph
