France: the view from the extreme centre
Yesterday François Bayrou made his major policy speech about the French economy: it runs to 33 pages and I’m not going to catalogue it here. Suffice it to say that from the outset he distinguished himself from his two principle rivals, Sarkozy and Royal, by describing France as it is now, rather than, as they did in their equivalent speeches, painting a rosy picture of how France might be after 5 years under their control. Bayrou’s policy has always been to avoid making promises.
He kicked off talking about the national debt. It would be misleading to say that the debt is a forbidden subject in the election, but most candidates apparently consider it’s not nice to talk about it, or perhaps they think we simple folk would not understand it, or would be frightened if we knew the truth. Bayrou claims there are three debts: financial, generational and ecological, and we have a collective responsibility to address all three. The financial debt is sobering if not downright frightening: 1,200 billion euros plus a further 800 billion in pension commitments. “Every day the State spends 20% more than it generates,” he said, adding that there are economists who consider it normal for a country to function with a massive debt. He believes, on the contrary, that massive debt cripples a country, is a brake on growth, induces this state of febrile insecurity we see in France today and is particularly harmful for those on low incomes, the elderly, the disabled, those who can no longer fend for themselves. He would add a clause to the constitution making it illegal for a government to present a deficit budget – as I think it is in the UK. Unlike Sarko and Ségo, he does not invoke that litany of long-dead men whose recitation is like reading the street-map of any French town – Jean Jaurès, Léon Blum, Condorcet, Zola, Hugo, Clemenceau, Carnot, Jules Ferry – as if somehow they were going to get us out of this mess. Bayrou simply describes France as it is now.
One of Bayrou’s closest advisors is also one of France’s best economists – by ‘best’ I mean he not only talks the hind legs off a donkey with great wit, insight and deep experience (amongst many other things he’s a magistrate at the Cour des comptes) but he’s an iconoclast and fiercely independent, a chap called Charles de Courson. He and I discussed the state of France for an hour or so last week, and while we talked mainly of other things (the French elite and why it is responsible for the mess France finds itself in), I was pleased that he took on board and incorporated in Bayrou’s speech everything I didn’t say on the French economy simply because I couldn’t get a word in edgeways. That’s what I call clever. But certainly Bayrou’s whole approach to economics is De Courson orientated: being up-front about the problem and realistic about the possible solutions (One of the things M. de Courson told me in his monologue-fleuve was that there are always several solutions to every problem, and all of them can work – this flies in the face of conventional enarque thinking that, as in mathematics, there is only one “right answer” – and only a bona fide enarque has the skill to find it).
Bayrou on business was also good news to me, and I would guess to the several hundred Brits who have set up businesses in France. While his rivals glorify the multitude of fonctionnaires (and implicitly the bureaucracy they uphold), he says clearly that small businesses will never flourish while they are buried under reams of Ubu-esque (actually more Ionesco-like) paperwork, describing exactly the situation of my neighbour, a plumber, whose wife spends all day every day battling the paperwork while her husband is out trying to earn the family income. Or indeed the situation I find myself in, wanting to pay a French cameraman for three days’ work with money from a UK-based production company: the quantity of forms and what they ask on them is simply mind-boggling, and will take me much more than three days to fill in. And we’re in Europe!
Associated with small businesses of course are French banks, which again Bayrou quite rightly identified as a disaster area – not a French exception as the current internet-based revolt in Britain against high-street banks shows. But in France they simply do not want to make small loans to a shop-keeper, say, to improve their premises.
At a more fundamental level he recognises that in France business is a dirty word, a mind-set that has to change if the country is ever to bring itself into competition with even its European neighbours. To set things straight, he took the trouble to point out the reality of the French business world: in fact of the country’s 2.7 million companies, fully 1.5 million are one-man bands, with no employees. A further 1 million companies employ between 1 and 9 people. Thus nearly 93% of all French businesses employ either no one or less than 10 people – a far cry from the stereo-type of slave-driving businessmen ruthlessly exploiting shed-fulls of workers. Like the inestimable Jacques Marseille (another iconoclast economist and historian whose recent book I shall be quoting soon), François Bayrou risks disbelief by telling his compatriots the way it is, rather than the way they think it was.
Bayrou proposes to allow every company, large, small or tiny, to take on two new people with no employers’ charges. The only thing the employer would pay on top of the wage would be something towards pensions.
Similarly with the electorally thorny 35-hour week. The problem at the moment is that often workers cannot work any overtime because every hour they work incurs even more charges for the employer. Bayrou suggests that they should work overtime at salary plus 35%, and their employer should pay 35% less than normal charges, so in fact the employer pays out the same amount as he would for a normal hour’s work while the worker gets 35% more. If you give the employer any more incentives to work his people overtime, he’ll do that rather than take on new employees, which has to be done as well – given, as M. Bayrou says, there are really 4 million unemployed and as many again under-employed.
He wants to introduce the idea of Business Angels and a French version of the American Small Business Act. To help young people start businesses he suggests that a “senior” be put over the company as a godfather for a year at least. Not sure who pays for him or her. In the same logic he suggests that people taking a first job should be paid by the state for the first year, since they are unlikely to bring much benefit to the company while they are learning. He also suggests a French VSO scheme where young people would do community service, either in France, Europe or in a developing country, and their work during these 6 months, officially assessed, would count on their CV’s.
As with much of what M. Bayrou says, the press do not give it much time, preferring to write about Sarkozy’s “improvised” visit to a deprived estate in Perpignan or Le Pen’s mega-meeting in Lille – about which I shall write later.