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Subject: Chirac leaves France sick man of Europe
AdamB    3/14/2007 2:43:47 PM
Chirac leaves France sick man of Europe New Zealand Herald Thursday March 15, 2007 Matthew Lynn After four decades in politics, Jacques Chirac will leave a dismal economic legacy. The French President, who announced this week that he will not seek re-election, led a weakened and demoralised country that is in need of drastic measures. Almost alone among Europe's conservative leaders, he showed little interest in economics or business. As a result, he allowed the debate to be dominated by socialists. That can be seen in slow growth, high taxes, crippling unemployment, and a hysterical reaction to globalisation. Unless his successor can turn that around, it is hard to see a healthy future for the French economy. "Chirac, of course, has not been an enthusiast for structural change in the French economy, preferring to stick to the traditional line that the moral defects of the free market make it impossible for France ever to adopt that system," said Stephen Lewis, chief economist at Insinger de Beaufort Holdings SA in London. There is little satisfaction to be drawn from any survey of Chirac's 12 years in power. He may have had some successes in foreign policy: most countries probably wish they had thought a bit longer about sending troops to Iraq. Yet the persistent failure of the economy has left France rightly nervous about its prospects. All the verdicts are damning. "Which economy is going to wear the 'sick man of Europe' shirt now?" asked Morgan Stanley chief European economist Eric Chaney in a recent note to investors. "Among the larger euro-area economies, the answer is in my view unambiguous: it is France." Other European countries are performing better under the same conditions, say economists Patrick Artus, Elie Cohen and Jean Pisani-Ferry. "Too few French producers are able to compete on quantity or quality, and they have been too timid in reaching out to the new areas of growth in the world," they said in a report for the Centre for European Reform in London. "For a decade, this problem was hidden, initially by the weakness of the euro, and subsequently by the temporary loss of German com-petitiveness. But today it is clearlyvisible." Spot on. A weak euro gave France a temporary boost. So did the anaemia of the German economy. Now that the euro is strong again, and Germany has put itself on the road to recovery, France looks painfully exposed. France is losing its share of world markets. The trade deficit swelled to €29.2 billion last year from €22.9 billion a year earlier. The economy grew 2 per cent last year, lower than the euro area's expansion of 2.6 per cent. And France's unemployment rate of 8.5 per cent in January was still among the region's highest. Chirac must take responsibility for that record. He never bothered to stand up for business and push through free-market changes. Even the 35-hour week remains in place five years after the Socialist Government that created it left office. In France, there are virtually no pro-business, pro-market voices left. Most of the country isn't even hearing any serious analysis of what is wrong. The Socialist presidential candidate, Segolene Royal, argues for yet more public spending and fines for firms that move jobs abroad. Her conservative opponent isn't much better. Nicolas Sarkozy is reduced to attacking hedge funds, and calling for a European tax on "speculative movements". Both candidates should be offering labour-market programmes, lower taxes, and deregulation. Neither is proposing enough to make a difference. France needs to embrace de-industrialisation, as Britain did more than a decade ago. It must start understanding that globalisation is an opportunity, not a threat: such a highly educated nation should be revelling in the money to be made from free trade. Instead, it is afraid and resentful. Chirac's legacy is a country that has forgotten how to compete in the global economy, and is reduced to railing against the modern world. Meanwhile, the best and brightest young French people hop on the train to London to make their careers there. It would be hard to think of a more telling indictment of a leader. http://www.nzherald.co.nz
 
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JIMF       3/14/2007 5:34:18 PM
Chirac mentioned something about France still having surprises for the world in his farewell speech.   You might want to post some troops on your end of the Chunnel in case he was indulging in some sort of Napoleonic fantasy.   
 
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french stratege       3/14/2007 6:46:22 PM
After four decades in politics, Jacques Chirac will leave a dismal economic legacy.
The French President, who announced this week that he will not seek re-election, led a weakened and demoralised country that is in need of drastic measures.

Right until now

Almost alone among Europe's conservative leaders, he showed little interest in economics or business. As a result, he allowed the debate to be dominated by socialists.
He is not a conservative and things are more complicated than that

That can be seen in slow growth, high taxes, crippling unemployment, and a hysterical reaction to globalisation. Unless his successor can turn that around, it is hard to see a healthy future for the French economy.
Everybody in the elite is aware of the problem

"Chirac, of course, has not been an enthusiast for structural change in the French economy, preferring to stick to the traditional line that the moral defects of the free market make it impossible for France ever to adopt that system," said Stephen Lewis, chief economist at Insinger de Beaufort Holdings SA in London.
Again more complicated than that

There is little satisfaction to be drawn from any survey of Chirac's 12 years in power. He may have had some successes in foreign policy: most countries probably wish they had thought a bit longer about sending troops to Iraq. Yet the persistent failure of the economy has left France rightly nervous about its prospects.
Even 2% growth is not exactly a failure.After all difference between UK GDP, Germany and France is only few %


All the verdicts are damning. "Which economy is going to wear the 'sick man of Europe' shirt now?" asked Morgan Stanley chief European economist Eric Chaney in a recent note to investors. "Among the larger euro-area economies, the answer is in my view unambiguous: it is France."
Italy is the country which is the most sick
Other European countries are performing better under the same conditions, say economists Patrick Artus, Elie Cohen and Jean Pisani-Ferry.
Some yes


France is losing its share of world markets. The trade deficit swelled to €29.2 billion last year from €22.9 billion a year earlier. The economy grew 2 per cent last year, lower than the euro area's expansion of 2.6 per cent. And France's unemployment rate of 8.5 per cent in January was still among the region's highest.
Unemployment number is disguised .In fact under employment in public sector means that there is maybe one million of people with jobs which could be supressed, and on the other side a lot of people on the dole have secondary illegal  jobs  .It is estimated that illegal work in GDP share is now twice than 20 years ago at 15%GDP.
I know personnaly people on the dole having offically 600€ per month minimum state help and earning 3000€ per month illegally without paying any income tax.
Chirac must take responsibility for that record. He never bothered to stand up for business and push through free-market changes. Even the 35-hour week remains in place five years after the Socialist Government that created it left office.
Yes Chirac has done nothing..35 hours is not our biggest problem when you know the law.It allow company to get 48 hours per week when they need it without paying extra fee.In fact 35 h law means average annual work time.
ANd most of the french are not on 35 hours but still 40 hours or more.However I think we should reinstore 40 hours week.

In France, there are virtually no pro-business, pro-market voices left. Most of the country isn't even hearing any serious analysis of what is wrong.
Elite don't say the truth and what will happen.A lot of ordinary French people have few economical culture because of leftist public education/medias and are afraid of a change nobody explain to them.

The Socialist presidential candidate, Segolene Royal, argues for yet more public spending and fines for firms that move jobs abroad. Her conservative opponent isn't much better. Nicolas Sarkozy is reduced to attacking hedge funds, and calling for a European tax on "speculative movements".
Both are lying to win election

Both candidates should be offering labour-market programmes, lower taxes, and deregulation. Neither is proposing enough to make a difference.
yes but wait and see

France needs to embrace de-industrialisation, as Britain did more than a decade ago.
This is complete madness.I prefer Japanese or German way.The day Chinese say you fuck and taxe your investment in Chinese firms or raise Yuan value , or compell you to sell your shares, you will be naked since you would have lost your ma
 
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ProDemocracy    FS   3/15/2007 9:49:48 AM
There is little satisfaction to be drawn from any survey of Chirac's 12 years in power. He may have had some successes in foreign policy: most countries probably wish they had thought a bit longer about sending troops to Iraq. Yet the persistent failure of the economy has left France rightly nervous about its prospects.
Even 2% growth is not exactly a failure.After all difference between UK GDP, Germany and France is only few %
 
---wrong FS.  Germany's GDP is something like 1.8 trillion (roughly) while UK is 1.4 and France is 1.3 (roughly).  UK and France are pretty close but every year that the UK economy is healthy and experiences solid growth while the French economy lags behind - will widen that gap.  But Germany's GDP is significantly higher than UK and France.
 
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french stratege       3/15/2007 6:39:51 PM
You are right Prodemocracy I did a mistake by not re reading my post : it was GDP per habitant which is quite similar in UK, France and Germany.For overall GDP, UK and France are very close and we could even say within measurement margin error.
 
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