French policies on taxes and benefits proposed for the 2007 election
February 19th, 2007 | 
Author: Boris over at France This Way writing about the upcoming French elections reminds me that I’m registered to vote here and perhaps I should find out some more about the people who I might be asked to vote for.
Although registered to vote here, I can only vote in the local and European elections, not the national ones that Boris talks about. Still, it’s interesting to read his take on the policies being proposed by the leading candidates.
Sarkozy definitely sounds like the candidate that France needs. Unfortunately, going by past performance he would more than likely back down from his policies in the face of certain public demonstrations against reductions in benefits. Does that mean that France needs Royal with her policies of increasing benefits and just borrowing more and more to pay for it? Boris suggests that getting him elected and driving France to the abyss would get someone strong enough to pull France out of the hole next time around but I don’t think it would: France would just go sailing over the abyss with spiralling unemployment as it became too expensive to employ people and too difficult to entice people to work anyway when the benefits were so high.
I for one would be quite happy to remain unemployed until retirement age if I was getting paid 90% of what I previously earned. After all, that would free me up from the expenses of going to work each day and would almost certainly mean that I’d get more net “pay” than I was before. Why would anyone be daft enough to look for work under those circumstances?
In fact, the only fly in the ointment in this scenario is that France quite clearly doesn’t have enough money to pay for the pensions that it’s contracted to pay for. At present, there doesn’t appear to be any option other than “pay as you go” schemes in France. These are wonderful inventions which mean that as soon as the scheme is introduced all those presently retired get a full pension which is paid for by those currently working. Unfortunately, since they aren’t funded the whole system depends on having a reasonable number of people working for each person retired.
When old age pensions were first introduced in the UK way back in 1908 for over 70s, the average life expectancy was 50 ie most people died before they received their pension. Now though, with life expectancy over 70, most people do receive their pension. So whilst in 1908 it was no problem paying the pensions in that most people didn’t live long enough to get them, now we find taxes increasing more and more to cover pension payments and yet still there is no “money in the pot” to pay for them.
So what will happen in France? I think that regardless of who is elected, social contributions and benefits will remain high because no French polician is prepared to stand up against the certain protests against reducing benefits. So, the country will have to borrow more. That’s not a sustainable strategy and sooner or later the lenders will call a halt. When they do, it will more than likely be catastrophic for France with widespread and substantial cuts in benefits and taxes called for accompanied by privatisation of just about everything I suspect.
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The voters in France may vote heavily for Royal because they see her as a person who will guarantee them more socialist programs that will afford them the opportunities to stay employed even if they aren’t doing their jobs. Royal wants to be isolated from the US, that will be a big mistake, IMO.
Sarkozy, who seems to want to have diplomatic ties with the US will only fuel more hatred for the US in France because whatever goes wrong in France will be blamed on the US. That seems to be their excuse for everything.
Nonetheless, it will be interesting to see if they fall for the Royal PR program. Promises mean nothing if they can’t be kept.
I agree with you that who ever is elected will buckle to the protesters. In France, the strikes don’t last long because they are given what they want as soon as they pull out their strike signs. It reminds me of a spoiled child who is given candy every time they cry. Eventually, the candy jar will become empty.
I think you’re right in saying that they’ll vote for Royal. Unfortunately, she’ll probably be able to keep her promises for the duration of her term but by borrowing more and more. That in turn will make the turn-around even harder than it needs to be.
It reminds me so much of the UK in the 70s. No matter how daft the demands the Labour government always seemed to give in until it could do no more and the IMF had to be called in as nobody else would lend them any more money.
What’s worse this time around is that France won’t have the option of just letting the value of the currency to drop.
I have also heard that the French wine industry may be taking a big hit with the popularity of California and Australian wines. This will hurt their economy further, IMO. France needs to wake up to the 21st century and take their heads out of their philosophy books. I have to laugh because it seems the French are falling all over Royal because they like the looks of the outside package (i.e. how she looks in a bikini) and they aren’t looking at her inexperience or knowledge regarding foreign relations. You would think after seeing what a foreign relations disaster President Bush has been they would learn that you can’t run a country on PR and sound bytes. I remember during the first election for Bush, it wasn’t uncommon to hear the comment, “He looks like the kind of guy I could sit and have a beer with.” Well, look where that got the US!
Arnold, do you think that Royal is just a puppet for her party and someone else is pulling the strings, like Cheney/Bush?
We live in a wine area in France and it’s not the foreigners that are hitting the industry – it’s the French themselves. What is happening is that the local growers are trying to sell the wine the way their parents did and it’s not working because people are no longer content to buy the cheap (and poor) wine that they produce. People these days are drinking less but drinking better quality wines.
Interestingly, a number of British growers have been buying up vineyards in the area and they sell all that they produce. But… it’s all exported (mostly to the US ironically) and their prices are around TEN to TWENTY times the prices that the locals were getting for wines produced from the very same vineyards.
Hard to say re Royal. She has the look of a puppet but then she could also be the real thing and you’d never know unless you were quite close to the central circle.