JEAN-PAUL PELISSIER / REUTERS BANNERS French workers protest in Marseille against high unemployment and planned labour reforms.

Viewpoint     The Fat Lady Is Singing
	France's economy can't create jobs unless it becomes more like Britain
	By ERIC LE BOUCHER

Posted Sunday, September 25, 2005; 14.16BST
In his best-selling book on the state of the French bureaucracy, Roger Fauroux asserts that France has chosen the "Paris Opera system" as its social model. "Who pays for the Opera?," writes Fauroux, a former ceo of Saint-Gobain, director of France's famous Ecole Nationale d'Administration (ena) and a minister under François Mitterrand. "Not the wealthiest — they get invited. Opera lovers, whether well-off or not, pay only a part of what it takes to put on a spectacle. The rest is financed by the state budget — that is, by taxes gleaned from the middle classes and business owners, who get nothing from the Opera. Should anyone dare to question this system, unions and performers are called to the rescue to make sure it survives. That's the way it is: the indirect and opaque robbery of the weak to finance the leisure of the rich has become an acquired right protected by all conservative forces. And it is this that we call 'popular opera.'"

Thierry Breton, Jacques Chirac's current Finance Minister, has his own criticism of French behavior: "We are financing our social model, to which we are so attached, on credit." Breton points out that public debt reached 65% of gdp at the end of 2004, compared to 58% in 2002, the start of Chirac's current term. France's financial position is continuously deteriorating. As the Cour des Comptes, France's Audit Office, deplored in a 2004 report, "The State is in deficit even before it pays interest on its debt." A social model paid for on credit only makes the problem worse. As Fauroux points out, the French model doesn't defend the weakest, but the most protected. According to Michel Camdessus, former head of the imf, 27,000 people leave their jobs every day for various reasons: bankruptcy, closure, downsizing. Of these, only 540 amount to "economic dismissals," a particular judicial category that in France requires negotiations with unions and public authorities.

"The entire jobs-protection scheme is centered on those 540 dismissals," noted Camdessus in a 2004 report to then Finance Minister Nicolas Sarkozy. "This scheme reflects a strategy that protects existing jobs rather than employment in general." To be sure, the weakest aren't abandoned. France grants a minimum income to those who have lost their unemployment insurance. The nation still has a social system that works, more or less. But France's unemployment has been around 10% for 20 years, poverty (measured by those who live on less than €650 a month) touches 11% of the population, and there are 1 million children living in poverty. Too often, the decline in French social indicators is ignored. It is time for France to open its eyes to what's going on elsewhere. Sweden, for example, has seen great success in governmental reform achieved by dividing up administrative tasks among 300 agencies, some of them funded by private capital. Inspired by the private sector, key principles of responsibility and efficiency have been introduced in place of the old habits of more bureaucrats and more credit.

And then there's Britain. Tony Blair's government has seen steep increases in spending on public services such as education, health and transportation, while injecting them with notions of efficiency and customer care. British universities are better than those of France. And Blair spends more so that the jobless — starting with the most vulnerable categories like single mothers — can get the training they need to find work. The Paris Opera may be a wonder, but on the scale of a national economy it represents a model that does no more than pile up high taxes while encouraging social dislocation.

Eric Le Boucher is an editor at the French daily Le Monde

Why Germany Can't Restart The Engine [Nov. 7, 2002] Unemployment is high, bankruptcies are rife, banks are teetering and taxes are going up. How did the German economy get this bad? Coping with Labor's Pains [Apr. 16, 2002] Union boss Sergio Cofferati may be the only Italian on the left who can challenge Prime Minister Silvio Berlusconi Across The New Frontier [Jun. 18, 2002] Governments across the E.U. are cracking down on immigration. Will their tough new measures create more problems than they solve? Blood, Sweat, Toil and Tears [Aug. 06, 2001] As the slowdown worsens, Europe's jobless look to the state to ease their pain. Get Us Out Of Here [Dec. 16, 2002] German businesses are starting to flee rising taxes, a failing economy and a Chancellor who can't seem to cope Growing, Growing ... Gone? [Feb. 14, 2005] China's under control, Europe's finally reforming, and the global economic outlook is rosy, right? Not quite No Entry [March 1, 2004] The E.U. wants to discourage migration from the new member states in the east. Saying No to Profits [Apr. 15, 2001] Since Marks & Spencer and Danone announced thousands of job losses, France has been fighting back with court action, boycotts and demos Search all issues of TIME Magazine Indicates premium content