What Up With France?

You may be planning to travel to Europe this summer and you're wondering what's going on in France. Is the situation bad? And if so, can problems be solved?

The short answers I would give are: Very bad, and no.

Why can't these problems be solved, at least not in any definitive manner? My reasoning is simple: Mr. Macron is not Mrs. Thatcher, and France is not England.

By Benh LIEU SONG - File:Tour_Eiffel_Wikimedia_Commons.jpg

Facts as I perceive them:

France has more than flirted with socialism throughout its post-revolution history. During the most recent 100 years, socialist presidents were in power 1924-31, 1947-54, 1981-1995, and 2012-2017. That’s 1/3 of the time. With voting results close to 50-50 each cycle, that’s a lot of socialists.

The current retirement system was set up after WWII. Communist pressure inside the country, led by the “resistance” against the Nazis, forced De Gaulle into compromises that have set the country on a six-lane highway towards the left. Gradually over the ensuing seven decades, socialist regulations and “fixes” took hold in one domain after the other.

Private pension plans have become increasingly fragile, probably though a combination of bad internal management and weak national monetary policy. They have been bailed out/fused together over the years. For example, I know someone who receives a basic state pension and two other supplemental private pensions that have changed names about three times over the past ten years.

Meanwhile, the nationalized system is approaching bankruptcy, just as is the case almost everywhere it is tried including the US. With pressure from the EU, France is trying to reduce its deficit/debt, which is a good thing. However, France is still basically a socialist country, so when they try to reduce the budget and/or increase taxes to solve the budget problems, they can’t reduce benefits without the public going nuts.

You have noticed the “yellow vest” crisis, which came about because of a minor gasoline tax hike. Minor perhaps, but this was the “last straw” for many people since it is the outcome of years of tax increases and service reductions. (Example: Healthcare used to be tolerably good. Today, it is embarrassingly poor: a year’s wait to consult certain specialists; people waiting 12 hours to see a doctor in emergency rooms; rampant overcrowding and under-staffing; suicides among health workers.)

Today, Macron has decided to pool all national and private retirement pension set-ups into one large system that is complicated, misunderstood and poorly explained. As a result, every single benefit group is howling: the unions, the lawyers, the nurses, the federal bureaucrats, the railroad workers, the energy sector, the transportation sector, retirees. – even the ballet dancers and concert musicians. So even though the unionized sector of the population is small, popular anger against these reforms is high.

Macron has a majority in France’s equivalent of Congress, so the reforms might pass, especially because they can dispose of a silver bullet called the "49-3." This is a fast-track code section that can be used in case of need, but it tends to cause irritation and suspicion.

Everyone is getting exhausted by the constant strikes and demonstrations, which are hurting not only commuters and city dwellers but also many commercial entities that depend on peaceful coexistence. The French are survivors so they manage to scrape by, and strangely enough they still cling to their love of what they call “solidarité,” which is essentially the redistribution of wealth through public benefits. They don’t see that this redistribution, combined with obligatorily high taxes and rigid labor laws, is destroying their economic model.

I believe it will destroy Europe, but we’ll just have to wait and see. It might even destroy Western Civilization as we know it if it catches on in the US.

Francophiles watch the news every day to see if we can discern a clue about how this will end. Recently, the French “Congress” has started debating the pension reforms on the floor, but the opposition has filed more than 41,000 amendments, making the process slow if not impossible. Meanwhile, subway and train strikes continue to render ordinary life most difficult. Yet somehow life seems to go on.

What a paradox is this beautiful country: so smart is so many ways, and so dumb in others. And when I think it's very possible the US will go down the same rabbit hole....