Thursday, May 20, 2010

Austerity

Paul Champsaur and Jean-Philippe Cotis are the authors of a report to the president which argues that neither growth nor inflation will suffice to restore French state finances to a healthy condition. Additional efforts will be needed, they say, to reduce state expenditures over the next decade. The word "austerity" has been banned from the public vocabulary, so perhaps we'll have to say simply that il faudra sarkozyr le budget de l'État (see previous post).

Meanwhile, the president, taking a leaf out of the German playbook, has announced a constitutional amendment that would require each president to set forth his budget goals for the quinquennat upon taking office. This, I imagine, will be a bit like a marriage vow: the newly elected president, like the newly wed husband (wife), will swear fidelity and promise to adhere to the highest principles. What he (or she) then does will depend, however, on his (her) character rather than the sworn oath, although, to be sure, one can expect broken oaths to be cited in subsequent domestic spats and/or divorce proceedings. Promises of virtue are unlikely to sway investors, however, who rather resemble divorce lawyers in viewing romantic effusions with a jaundiced eye.

Meanwhile, Sarko is less enamored of another German initiative, to ban "naked shorts" and credit default swaps in certain markets. Frau Merkel characterizes this measure as an attack on speculation, while cynics see it as protection for German banks holding bonds vulnerable to speculative attack. Whether the idea is good or bad, the unilateral German initiative points up the utter lack of European coordination (let alone international cooperation, with the US still dickering over its financial regulation bill), which is as unsettling to markets as speculation.

Neologism

"Sarkozyr" has become a verb in the French language, synonymous with rapetisser. For conjugation and usage details, see the link.

Saving on Gas

Sarko's ministers haven't been asked to take salary cuts, but they will have to make do with smaller cars. Il faudra sarkozyr leur voiture de fonction (see next post for the meaning of sarkozyr).