Tuesday, December 27, 2011

Danton to DSK

Who? Depardieu, of course. And Isabelle Adjani as Anne Sinclair. Oh, the humanity! (h/t RF)

The State as Puppeteer

Paul Betts has a scathing piece in the Financial Times about the French practice of choosing "national champions" in various industries and staffing them at the highest levels with products of the Grandes Écoles hand-picked by the Élysée. The immediate pretext for the piece is the 2.4 billion euro writedown at Areva following the ouster of Anne Lauvergeon, who built the company after being selected by Mitterrand. Her removal followed a long public struggle with Henri Proglio, now chairman of EDF but formerly head of Veolia, where he compiled a lackluster record, according to Mr. Betts, but was nevertheless dubbed by Nicolas Sarkozy as "France's best industrialist." Other sick champions include Air France, EADS, and Thales. Presidential string-pulling is the system's biggest flaw, according to Betts, who also writes that under Sarkozy "this system has reached its apotheosis."


The unemployment figures are terrible. For workers over 50, unemployment is up by more than 15%. For women and long-term unemployed, the number out of work has increased by 7% in each category. Meanwhile, the government, in response to the euro crisis, is promising more austerity, which can only make matters worse. Small businesses are calling for an extension of the temporary labor contract from 18 months to 36. In Germany, where the unemployment rate is only 6%, compared with 10+ in France, job-sharing through reduction of hours (Kurzarbeit) has helped to limit the damage from the crisis, or at least spread it around, but this has not been tried in France, where labor-market regulation is stricter. Perhaps it's time to think about some new remedies, and Kurzarbeit is one that can be tried without spending government money, which is off the table for now.

UPDATE: I spoke too soon. I see that Xavier Bertrand is proposing a French version of Kurzarbeit, called "activité partielle." He also wants more flexibility in work organization if necessary to maintain competitiveness.