Monday, July 23, 2012

Attention!

In today's mail arrived the news that I have been promoted from Chevalier to Officier de l'Ordre des Arts et des Lettres. Indeed, it seems that the promotion was actually made some months ago, while Sarkozy was still president, but since the wheels of the French bureaucracy grind exceedingly slowly, I had no idea. As someone told me the last time I received a French decoration, the proper attitude to take is, "Ça ne se demande pas, ça ne se refuse pas, ça ne se porte pas," but I confess that I do occasionally wear my lapel ribbon.

Is the End Nigh?

For the euro, that is. As FT Alphaville points out, Spain has €44 billion in reserves and imminent needs to fund a lot more than that in interest and principal turnover:

Italy is not in much better shape. So, will the ECB start buying? Will Germany let it? Will Greece exit, since the IMF is ready to pull the plug? Will a Greek exit precipitate a general collapse or a division of the euro into two zones, a Neurozone and a Seurozone? The old worries are back with a vengeance.

Le Cacheux on Competitiveness

Jacques Le Cacheux has an excellent analysis of France's competitive position and of proposals to improve it. Among other things, Le Cacheux notes (as I have repeatedly emphasized here) that France has a serious problem in manufacturing due in part to high unit labor costs in that sector:
Pourtant, l’indicateur se référant à la seule industrie manufacturière délivre un message bien différent (graphique 2) : en moyenne depuis le lancement de l’euro, la compétitivité-coût de l’industrie française par rapport à ses partenaires de la zone s’est sensiblement maintenue, se dégradant très légèrement sur la période ; mais dans le même temps, l’industrie allemande a, quant à elle, très substantiellement amélioré la sienne – de près de 20%.
This is not the whole story of France's deteriorating current account balance, to be sure, but it is part of the story, and Hollande's determination to attack this problem is praiseworthy. In the remainder of his piece, Le Cacheux carefully analyzes the positive and negative aspects of both the social VAT and the CSG. Here is his bottom line--cautious approval of the Socialist strategy.:
Alléger le coût du travail en transférant la charge d’une partie du financement de la protection sociale vers des prélèvements autres que les cotisations sociales apparaît souhaitable et possible, tout en rendant le système fiscal français plus juste. Pour ce faire, il convient de compenser la baisse des cotisations sociales, patronales, mais aussi éventuellement salariés, par un alourdissement des prélèvements pesant sur la consommation et sur les activités polluantes, afin de modifier résolument les prix relatifs, donc les incitations qui pèsent sur les entreprises et les ménages dans leurs choix de techniques de production et d’emploi et dans leurs choix de consommation ; et de conduire en même temps une réforme de la fiscalité directe qui permette de compenser les effets négatifs de ces modifications sur le pouvoir d’achat des détenteurs de revenus modestes et de rendre l’ensemble des prélèvements directs plus progressifs. Alourdir la CSG sans conduire cette grande réforme[2] serait léser ces catégories.

Du Rififi chez les ex-Sarkozystes

Defeat is a beautiful thing in politics because it strips away all the hypocrisies that surround power as long as it lasts. Thus we learn that Raffarin saw Fillon as a man "sérieux, secret et solitaire" who lacks the stuff of a "party leader," though other "missions of the first rank" might be found for him at some future date. Copé, on the other hand, gets Raffarin's support not because he has the stuff of a party leader but because he was loyal to Raffarin when the latter was prime minister--"he scratched my back, so I'll scratch his," a high political principle, to be sure. Meanwhile, NKM has thrown her hat in the ring, while Bruno Le Maire, as we saw last week, has timidly dipped his toe in the waters.

NKM and Le Maire are running on what they call their "ideas," although no actual ideas are in evidence. What they mean by "ideas" is a readiness to reconsider the premises of Sarkozy's program. Having judged that the party received a "whupping," both think that they need to put a new face on the interests that the UMP represents. Copé, on the other hand, is interested only in lining up big battalions behind him. He has the stuff of a party leader, dixit Raffarin, which means first and foremost knowing how to count. Fillon, on the other hand, is counting the number of party members who can't stomach Copé. This is substantial but probably not quite enough to put him over the top. So it's not a very edifying contest on the right, but at least it distracts the UMP from what would otherwise be its full-time occupation, sniping at everything Hollande has done. With the exception of Raffarin, who actually has some remarkably kind words for the new Socialist government. In fact, I'm surprised that these judgments didn't cause more of a stir than his relatively mild dig at Fillon:


Comment jugez-vous les premiers pas de la présidence et du gouvernement socialistes ?Le mérite de l'exécutif, ces premières semaines, c'est d'apporter un certain apaisement, dont la société française avait besoin. Je vois plusieurs éléments positifs, notamment en matière de politique étrangère : Laurent Fabius semble avoir réussi sa mise en trajectoire.
Mais apaiser n'est pas anesthésier, et je crains que l'évaluation que fait M. Hollande de la crise manque de gravité. Par exemple, le choix de la loi organique plutôt que de la loi constitutionnelle concernant la "règle d'or" serait un mauvais signal, à la fois pour nos amis allemands et pour les marchés. Je crains que de trop nombreuses décisions ne soient reportées à 2013. Les impôts tout de suite, les réformes demain, c'est dangereux.
Que pensez-vous de la suppression des exonérations de charges sur les heures supplémentaires votée mercredi à l'Assemblée nationale ?Je comprends qu'il s'agit de tenir des promesses. Mais je pense que la décision est mauvaise. Nous n'avons pas la même philosophie que la gauche en matière de travail. La droite est favorable à l'augmentation du travail, la gauche au partage du travail. C'est un vrai clivage.
La gauche semble s'être convertie à la baisse du coût du travail, est-ce une bonne nouvelle ?Progressivement, la réalité s'impose à tous les gouvernements. Trop de socialistes ont cru que la crise était imputable à Nicolas Sarkozy. Mais ce dernier est parti, et la crise et ses effets sont toujours là. M. Louis Gallois [ancien président d'EADS, commissaire général à l'investissement] a appelé à un"choc de compétitivité" pour la France, c'est le nouvel "impératif industriel". Je pense que c'est un début de lucidité économique.

Hollande at the Vel' d'Hiv'

François Hollande gave a superb speech, one of his best, at the site of the Vel' d'Hiv', where Jews rounded up by the French police in 1942 were taken to await deportation. Giving full credit to Jacques Chirac, who was the first French president to acknowledge the responsibility of the French state--the French Republic--in this crime, he went even further than Chirac had.

Some people on the right are not happy, however. Henri Guaino is one of them. From Guaino we hear the familiar refrain that Vichy was not France, that the true France was in London with de Gaulle, etc. etc. One can understand the argument at a symbolic level, however feeble the actual adherence to the idea, let alone the reality, of resistance in 1942. What is not acceptable, however, is Guaino's further suggestion that Hollande's acceptance of responsibility in the name of France is motivated by an alleged affinity between Hollande and the collaborators of the 1940s:

Peut-être que M. Hollande se sent plus proche de la France des notables apeurés qui se sont précipités à Vichy après l'armistice? Ce n'est pas ma France.
This is a slur on anyone whose reading of history is different from Guaino's. It is tantamount to an allegation that anyone who does not believe that l'Appel du 18 juin exonerates France--the state and the nation--of all responsibility for what happened during World War II is "objectively" a collaborationist. Such a charge is unworthy of M. Guaino, who is a student of history. He should know better, however commendable his commitment to the Man of June 18.