Wednesday, September 12, 2007

A Frank Exchange of Franco-German Views

The signs of tension in the Franco-German relation involve not only the difference over Siemens' participation in Areva but also, according to a British observer, matters of style.

The Local and the National

Economist Élie Cohen, in a letter to Socialists, asks why voters "tend to favor Socialists locally for their effective and compassionate administration but reject them nationally for an ultra-leftist discourse predicated on a denial of reality." In a court of law, one would object to this kind of question on the grounds of "asked and answered." Nevertheless, Socialists would do well to attend to Cohen's admonitions. He suggests three factors that tend to limit possible reform: an aging population, rapidly increasing health costs, and fear of unemployment. Responsible reform must take these factors into account by accepting the need for a longer working life in proportion to increases in life expectancy; for medical coverage that is complete for major events but that is to involve some copayment for routine care, to be negotiated; and for assistance to workers in making the transition from one job to another and in acquiring new skills.

The problem, of course, is that the right makes the same points. How is the PS to differentiate itself? Cohen's letter, lucid in other respects, neglects the political side of the questions he raises. Déformation professionnelle de l'économiste?

Peuple de Gauche

Libération, which tomorrow is sponsoring a colloquium in Grenoble under the rubric Vive la politique!, today published--and tendentiously interpreted--a poll purporting to show a sharp shift in the attitudes a group it describes as the core of the left-wing electorate. The results show overwhelming acceptance of "the liberal economy" (not further specified) and "reduced public expenditures." There is also support for measures to "increase productivity" in the state sector (why anyone would be expected to oppose this is a bit of a mystery). And most respondents say things are not going well for them.

The design and interpretation of this poll raise all sorts of questions. On the face of it, it seems to me that people were asked, "Do you accept reality?" and in large numbers they replied yes--a reassuring result, I suppose, and one that cannot be taken for granted, especially in light of recent American experience. "Are you content with reality?" Answer: mostly negative. Situation Normal, All Fouled Up, one might say. Is this news? Yet Libé, in an editorial entitled precisely Réalités, seems to think it has the skeleton key to the dominance of the right in recent French elections. I think not.

Sarkomices Agricoles

Sarkozy had a few words to say yesterday about the European Union's Common Agricultural Policy, which is about to celebrate its fiftieth anniversary. He outlined three principles for reform: "community preference," "food safety," and a supposed desire for reform on the part of farmers, "who do not wish to be welfare recipients, who do not wish to live on subsidies, and who do not want controls on the length of their sheep's fleece." It was a skillful rhetorical turn, especially those digs at regulation and welfare, but Sarko didn't really tip his hand about the actual policy reforms he has in mind, and he is in no rush, since this part of his program will become active only after France assumes the rotating EU presidency in June of next year.

There is a pressing need for reform, especially since EU enlargement. Historically, the CAP was an essential element of the Franco-German compromise that gave birth to the European community, and France has been the principal beneficiary. But with EU enlargement, larger and larger subsidies are going to new member countries, which have yet to experience the "rural exodus" that France, with the help of the CAP, accelerated in the 1950s and 1960s. The CAP has been much reformed since then, but the pressures for further reform keep growing, not least because of rising food prices, a major enemy in the all-important struggle to increase "purchasing power" without increasing labor costs. The CAP accounts for a big chunk of the EU budget, and many member countries would like to see their contributions reduced or their receipts increased or both. There is also pressure from the WTO and Third World countries for greater openness of European markets, and there will be close scrutiny of the use of "food safety" as a pretext for protectionist barriers. Yet there are real issues of quality as well as safety. There are also dangers for developing economies in transforming themselves into suppliers of Europe, as anyone who has seen the wrenching film "Darwin's Nightmare" can attest.

It will be interesting to see see how France uses its EU presidency to approach the issue of CAP reform. In the past two days I have spoken to two researchers who have contributed to think-tank reports commissioned by the French government. It seems that Sarkozy still has not made up his mind how to proceed in this area, and active reassessment is under way.

LATE ADDENDUM: The European Commission applauds Sarko's statement. Support from farmers too.

In case you're wondering about the title, the pun on Comices Agricoles (see Madame Bovary for a description) is intended to add to the list of 640 words formed from the sobriquet "Sarko" and compiled here.

(Thanks to Éloi for some references.)