Friday, October 03, 2014

The sick monsieur of Europe

The phrase 'sick man of Europe' was a mangled interpretation of a comment attributed to Tsar Nicholas I in his assessment of the Ottoman Empire.  Of course, as an epithet it is far more cutting than the long-winded sentence used by the Russian emperor, so posterity is indebted to 'Chinese Whispers'.  Although Britain grew faster and more consistently than it had in half a century to prompt Harold Macmillan to boast to the electorate, "You've never had it so good," other countries in mainland Western Europe had even more spectacular post-World War Two growth spurts, so in the turmoil of the 1970s, the UK was not as well equipped to deal with the oil shock and union militancy.  Thus Britain became the sick man of Europe, which transmogrified into the 'dirty man of Europe', in relation to its air, rivers and beaches when economic recovery was well under way.  Now, despite the ruling of nitrogen in British cities, our rivers and beaches are far cleaner than many in Europe and our climate emissions make the UK one of the few countries to meet the 1997 Kyoto Protocols.
But if one country doesn't fir the tag, it is the job of analysts to find some other victim worthy of it.  The pain in Spain, Portugal and Greece is just seen as a normal reversion to their pre-1975 basketcase economies.  Italy too is so often derided (unfairly as its economy is not much smaller than Britain's) that to apply the tag seems gratuitous.  Of other major countries, Germany has its troubles but its underlying strengths (notably exporting and manufacturing) remain too formidable and notwithstanding the occasional dips, it keeps the spinning top going.
So that leaves France, whose spinning top, if reports are to be believed, is rapidly running out of kinetic energy and is starting to rock erratically.  The Guardian, The Telegraph, Al Jazeera, Reuters, Business Week are just a handful of the publications that have come to a settled view with particular use of the phrase.  Even France's finance minister calls the country's economy 'sick'.  According to Al Jazeera, in mid-September, "Unemployment is higher than at any time since the late 1990s and has not fallen below 7 percent in nearly 30 years - creating chronic joblessness in the crime-riddden banlieues of France's big urban areas.  France has not balanced its books since 1974 and public debt stands at over 90 percent of GDP and is rising. Statistics released revealed French manufacturing confidence fell to the lowest in 13 months in August."  There is little effort to inject more dynamism into the French economy, say by privatising a few non-essential industries, loosening labour laws (not to UK levels but to create a little more flexibility), let alone raising the retirement age, as much of François Hollande's cabinet revolted over his 'move to the centre'.  Austerity apparently, to get the economy lean and hungry as the theory would have it, is off the table.  Unions will strike at the slightest indignity (recently two Metro workers were disciplined for allegedly drinking rum cocktails while at work - this was enough to take whole sections of the Metro out of action as the union demanded redress for the punished employees).
John Lewis boss Andy Street, after a visit to Paris to collect an award (a gong that is "made of plastic and is frankly revolting" - well, he won't be winning anymore of those then), decried France as "sclerotic, hopeless and downbeat... [I've] never been to a country more at ease... nothing works and worse, nobody cares about it."  To be fair, Street wasn't mounting the empty plinth in Trafalgar armed with a megaphone and scripted obloquy but addressing a group of entrepreneurs and offering explanation as to his delay when returning via Eurostar.  The Times picked it up.
Street continued, "You get on Eurostar from something I can only describe as the squalor pit of Europe, Gare du Nord, and you get off at a modern, forward-looking station [St Pancras]."  Moreover, "If I needed any further evidence of a country in decline, here it is.... If you've got investments in French businesses, get them out quickly."
Now, I admit that a new Baron Hausmann is probably needed as the streets around Gare du Nord turn into Amazonian expanses when it rains but it is a little harsh to call Gare du Nord the most disgusting place in Europe.  It is not so long that King's Cross (adjacent to St Pancras) would have drawn similar criticism.  Luckily, I have no stakes in French businesses, unluckily, my absence of wealth means I have no stakes in any businesses.
Nicolas Sarkozy tried to reform France in a milquetoast Thatcherite way (e.g. raising the retirement age to what, until recently, is the norm in the UK), but President Bling-Bling was given the boot in favour in favour of Mr Normal.  Now the political curve seems to be Bling-Bling is the new normal as Hollande records unheard of low approval ratings in France (though he still has some way to go to match former Israeli prime minister Ehud Olmert's 0% approval rating, i.e. a -100 score).  Sarkozy claims to be riding to rescue of France and he may win by default, if he finds himself in the second round with Marine La Pen, as Jacques Chirac did with the latter's father - French left-wing voters holding their nose to keep the far right out.  France is not in irreversible collapse and many aspects of French life easily outstrip those on the other side of 'La Manche'.  As with the UK, eventually France will recover but for the short- to medium-term there are serious dangers ahead and it is doubtful whether the current or the next occupant of the Élysée Palace can make decisive inroads into these problems.

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