Protesting cost-cutting measures at Paris' Place de la Bastille.
Some things are quintessentially French: A breakfast of pain au chocolat. Long hours smoking and debating at sidewalk cafs. Immense pride in the nation's fabulous artistic heritage. A distaste for everything American. And a firm belief in the superiority of the welfare state.
Nothing may be more French than the conviction that government can and should provide for the well-being of its citizens. The welfare state--that political-economic concoction of extensive social spending, state protection and regulated capitalism--aids every French man, woman and child from the day of their birth to the time of their death. Family subsidies pay mothers to stay home to care for children or hire a nanny instead. Visits to the doctor are almost always free. So is education. Even at universities, tuition is a mere fraction of what Americans pay. Some students even receive stipends to cover their rent. Workers are protected by strict rules that make layoffs complicated and costly. Unemployment benefits and pensions are generous.
And for a long time it succeeded. Even the most dedicated Tea Partyer would have trouble dismissing the results. French policies have created a healthy, well-educated population with stable jobs at companies of international stature and an income level that ranks with the world's highest. The welfare state is such an integral part of French society that no one can imagine life without it.
But the French may have to. The cherished welfare state may not be able to survive, at least as we know it today. It was founded on the noblest intentions--to foster a more equitable society by ensuring that all, no matter what their social status, had access to the fruits and opportunities offered by an advanced economy: a sound education, proper health care and a worry-free retirement. In many ways, its mission has been realized. France's national health system, for example, is considered among the world's best.
However, that idealism has run into a brick wall called financial reality. The cost of supporting state programs has been rising relentlessly. The French government will spend an estimated 30% of the nation's entire economic output on social services this year, compared with 21% in 1980, according to the Organisation for Economic Co-operation and Development (OECD). With debt and deficits mounting--France hasn't recorded a budget surplus since 1974--the pressure to control these expenses is becoming unbearable.
Almost the entire developed world is in the same fix as France. Even in the U.S., where the private sector plays a larger role in providing health care and other services, public expenditure on social programs has grown to about 20% of GDP from only 13% in 1980. "The welfare state is part of the social fabric, of our way of life," says Emmanuel Moulin, an economic adviser to French President Nicolas Sarkozy. But "there is a need for reform. This is clear."