Is France Doomed to Decline?

President Hollande. (Photo: George Henton)

Over the years, France has acquired the reputation of having one of the most generous welfare states in the world. Free education, free access to medical resources and an efficient health-care system are examples set for other countries to follow. The British Labour Party is one of such, its members praising free education and a more inclusive NHS. In the same way, France’s democracy and its focus on human rights are rooted in the French revolution, and thus have been part of France’s culture for well over 200 years. However, the French political system is on the verge of implosion, which could propel France’s cherished welfare system to ashes.

 France’s political system is based on three major aspects: a growing economy, an efficient political system and a generous redistribution system.

France’s political system is based on three major aspects: a growing economy, an efficient political system and a generous redistribution system. However in the last few years, the French economy collapsed, along with most of world’s economies. The Eurozone crisis weakened France’s ability to be competitive; it put French banks, extremely exposed in Greece, into a dangerous position. But this crisis was a worldwide crisis. The one that France is going through right now is specific, a sort of “French exceptionalism”. Low growth figures – 0.4% GDP growth in 2014 – and the highest unemployment in French history are all symptoms of an economy inadequately prepared to face the modern world. The latest proof, surprisingly unreported in Britain, is France’s displacement by the UK in the world GDP rankings.

 

Indeed France’s “Sécurité Sociale”, the equivalent of Britain’s NHS, is close to collapse. Its entire existence relies on the ability of the French government to gather enough resources to finance retirements, hospital bills and aid for large families. However, the weakened economy has created a high number of unemployed, forcing the government to deliver more and more financial relief to those affected. And the government has quite willingly done so, creating new financial helps for unemployed, part-time workers and minimum wage workers. The government argues the case that the more money spent could, potentially lead to an increase in consumption and return the economy to growth. However, although the unemployed deserve to be financially supported, such a high level of redistribution is only increasing French debt, the very cause of the crisis.

 

The case of the retirement age is the very example of the impossibility of the healthcare system to remain unchanged. Retirement age causes the entire healthcare system to break down. In an attempt to reform it, former President Sarkozy pushed back the retirement age from 60 to 62 years. This reform will be obsolete before even being fully applied, because the sum of all contributions made by the workers won’t be enough to cover the expenses of the retired. But more than the debt generated, it is the incapacity of reforming the system that should be pointed out. At the time of the reform, in 2010, the observers figured France would need to push back the age of retirement to 67 years to have a viable system. Sarkozy, initially going for 65 years, settled for a watered down reform. Likewise the new reform by former Prime Minister Ayrault in 2013 did not resolve any of the issues at stake.

 This reluctance to reform needs to be understood.

This reluctance to reform needs to be understood. At a time when Italy is making all the necessary reforms, where economic growth is back in the US, the UK and most European countries, why is France incapable of improvement? The answer lies in the division of the French parliament. The major economic reform, called the Macron law, is the proof of this division. Marked as a right-wing law by the left of the Socialist Party and the extreme left, opposed by the centrists and right wing parties, this bill could not be voted as such in the National Assembly. The government had to use the article 49-3 of the constitution, stating that a bill can do without the parliament vote if the assembly votes confidence in the government. This is a way to force reluctant MPs to vote for the law, with the threat of the assembly being dissolved.

 

However, the incapacity to make profound reforms does not lie in this government only. It lies in the political system that limited working hours to 35 hours a week and that views the welfare state as an unchangeable necessity. But in order to exist this state needs to find the means to reform itself. Giving more freedom to the private sector, a decrease of the numbers of civil servants and increase significantly the age of retirement, are all the more reforms that need to be put in place, but the government does not currently advocate such crucial changes. So, is France doomed to decline politically, economically and socially? In the current state of affairs it would seem so. But if there is a profound change in the political system, that needs to come from a coalition and parliament rather than just one leader, then France will be able to retake the place that is hers in the world and in Europe; the place of a leading country.

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