EUROPE	FEBRUARY 2, 1998 VOL. 151 NO. 5
	Adrift on a Sea of Despair French unemployment is more than just a source of malaise; it is paralyzing the nation By JAMES WALSH he scene might have come straight out of a Depression-era comedy starring Charlie Chaplin. In Paris, a troop of about 40 jobless protesters invaded one of the city's swankest restaurants, La Coupole. Refusing the management's somewhat flustered offer of sandwiches in the staff room, the gate-crashers proceeded to take seats in the dining room and order rounds of steak and oysters. After the feast, when the restaurant and sympathetic fellow diners had picked up the bill, about half of these good-natured revolutionaries moved on to the high-gloss Hotel Lutecia, where they demanded lodging. This time, their bravado did not get all they wanted, but they succeeded to the extent of bedding down in the lounge overnight. In a film, such exercises in tweaking the establishment would have drawn laughs at the faces of indignation: an outraged desk clerk puffed up like a toad, say. What happened in the actual Jan. 17 episodes, which followed daylong demonstrations in Paris by the unemployed, was more thought-provoking. The restaurant and hotel went out of their way to accommodate the visitors, whose droll adventures also won from the public much new sympathy. Just how deep that rapport was running became painfully clear to the French government a few days later when, in confrontations with the protesters last week, Prime Minister Lionel Jospin found that he had no wiggle-room left. So profoundly worried is France over the plight of the have-nots and the future of the economy that Jospin's offer of minor balms satisfied no one at all. After demonstrators invaded the headquarters of Jospin's Socialist Party, one young intruder yelled at an official defending the Prime Minister, "You'd accept living on 2,200 francs [$360] a month? Come on, give me your car and your apartment and take my place!" Not only Jospin but France's entire political class is now foundering on the rocks of an impossible choice. As a pillar of the European Union, the country has staked its future and reputation on joining the common-currency regime set to debut next Jan. 1, an arrangement that demands budget deficits equaling no more than 3% of gross domestic product. Yet after six weeks of strikes and takeovers of public buildings across the nation by the army of unemployed, leaders feel pressed to provide some relief. If budget-busting measures are passed, the only way to square them with European Monetary Union requirements would be through higher taxes, at a time when France's economy has just begun regaining its stride after years of sluggishness. As the crunch came last week, Jospin's seven-month-old government faced the prospect of crumbling by the middle of the year. One answer would be to deregulate the economy, but the time is out of joint for that option. In the booming late 1980s, the pains of reform would have been more easily absorbed, but the fallout now would likely strike the public as intolerable. The result may be even worse times ahead when the common currency brings about more flexible corporate decision-making whether the public likes it or not. A French diplomat argues, "Today we are the least economically and socially prepared of all nations bidding to participate in monetary union, and because of this we are going to see more jobs destroyed than created by the common currency. When you have lower wages and more flexible labor laws in Barcelona than you do in Perpignan, it's not hard to decide which city companies seeking to open new businesses will choose, or which one companies fleeing expensive production centers will opt for." How bad is France's unemployment? At 12.4% officially, it is one of the highest in the industrialized world. Even that measure understates the case by a country mile, however. As opinion polls published last week showed, the scourge cuts so wide and deep across French society, and claims so many secondary victims, that the much-discussed cleavage between job-holders and jobless turns out to be a myth. Altogether 78% of people questioned said that someone in their circle of family and friends was without work, and 44% said someone in their immediate family was unemployed. Nearly half of all respondents vouched that they had given or were now giving financial assistance to such family members, and one-third feared for their own jobs in the coming months. "I think this may explain to the rest of Europe and the world why the French seem to be so much more morose when we have the same problems that they do," comments Jean-Paul Fitoussi, an economist and president of the French Economic Observatory. Fitoussi was not surprised by the poll results, which confirmed the findings of a report he co-authored last year for the previous, conservative government of Prime Minister Alan Juppe--a report eventually suppressed. Besides the 3 million on unemployment benefits, Fitoussi notes, the numbers in low-paid part-time work and government training programs, workers who accepted early retirement against their will and the ranks of "discouraged"--people no longer looking for work--add up to a total of more than twice the official level. The study, he says, "told us that the problem was bigger than we wanted to admit, and also one created by years of inattention. This is one reason why the malaise in France is so deep and dark." Unemployment benefits in themselves have not been raised for a decade, and recipients at the bottom ranks draw payments well below poverty level: 37% have to make do with less than $490 a month. Though Jospin last week offered to index benefits to inflation retroactively to 1994, demonstrators angrily rebuffed him, especially since inflation is very low. His other offers of 350,000 new public-sector jobs and a work-week reduced to 35 hours, thus theoretically creating more private jobs, did not satisfy the protesters either. Economists acknowledged that Jospin's package would, at best, shave only a couple of points off the towering jobless rate. For 17 years now, French voters have switched between the political right and left repeatedly in hoping for a solution to their durable plight. One party after another has failed to produce it. Says economist Pierre Jacquet, deputy director of the French Institute of International Relations: "Unemployment is a huge and terrible human waste, but I don't think the solution can be found in increased state protection. Indeed, I think the answer lies in the other direction--somewhere between where France is today and the American model." As long as the state and society cannot stomach that approach, the worse France's malaise seems doomed to grow. --Reported by Bruce Crumley /Paris
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