-Caveat Lector-
>From www.newstatesman.co.uk/199908300016.htm
> The New Statesman Essay - Why the French really are different
>
> Andrew Jack on the nation that always insists on being an exception
>
> <Picture>With its big-budget advertising campaigns, aggressive lawsuits and
> vicious exchanges of words, it had all the trademarks of the ugliest of
> 1980s-style US corporate takeover battles. But the hostile bidding war designed
> to create a single giant banking group that drew to a close this month had one
> important difference. It was taking place in contemporary France.
>
> Such an unseemly public squabble for control among three Paris-based businesses
> would have been unimaginable even in the very recent past. Indeed, only a little
> more than a decade ago it would have been quite simply impossible, since all
> three banks involved - Societe Generale, Paribas and Banque Nationale de Paris -
> were still owned by the state.
>
> In a throwback to more typical practices only now on the wane, Jean-Claude
> Trichet, governor of the Banque de France, tried to intervene earlier this year
> to find a solution behind closed doors. He was an inspecteur des finances, drawn
> from the same elite civil service corps as the chairmen of two of the three
> banks concerned. But the issues were too important, the pressures too great and
> the egos too large to reach a cosy, amicable agreement. Time had moved on.
>
> The takeover was the latest example of the important evolutions that are taking
> place in French society. Francois Mitterrand may have launched a populist wave
> of nationalisations in the early 1980s, just as Margaret Thatcher was doing the
> reverse across the Channel. Yet the latest socialist government, led by Lionel
> Jospin, the former president's protege, has overseen a transformation far more
> compatible with Schroder's Germany or Blair's Britain than it might care to
> admit - without the benefit of someone else who has already done the dirty work
> and taken the political flak.
>
> In the two months after Jospin was elected prime minister in 1997 on a slate of
> blocking privatisations, he set in motion the sale of more state-owned companies
> than his Gaullist predecessor Alain Juppe had managed throughout his entire two
> years in office. In many other areas, too, the distinctive Third Way trumpeted
> by the French left has proved far stronger on rhetoric than reality.
>
> But there are still original aspects to the French approach, and ones too
> visible, too powerful and too distinctive to be ignored. Too visible, because
> France is one of the world's most widely visited destinations, attracting 142
> million Europeans alone in 1992-96. Too powerful, because it not only has a huge
> international social and cultural influence but is also an industrial powerhouse
> with the world's fourth-largest economy - ahead of both the UK and Italy. And
> too distinctive, because it dares to stand apart from the conformism of its
> partners in the G7 and similar organisations.
>
> France has frequently managed to provoke animosity among its allies as much as
> its enemies, as was proved by the all-too-easy bout of "froggy-bashing"
> unleashed in the wake of President Jacques Chirac's decision to relaunch nuclear
> testing in the South Pacific shortly after his election in 1995. Britons are
> willing to make disparaging remarks towards their nearest neighbour that they
> would never imagine uttering about other countries. Perhaps that is because
> France is the foreign land to which they are most exposed - and of which they
> may even be a little jealous, and perhaps because in many ways France and
> Britain are, to misquote George Bernard Shaw, a common nation divided by two
> languages. Both are former colonial powers trying to adjust to a less
> influential role in the world while still believing they have a model worth
> emulating. Yet their tactics are fundamentally different.
>
> While the British have got on relatively pragmatically with the evolution of
> their society, the French have characteristically adopted a more tortured
> intellectual approach to reform - or to the lack of it. Their policy-makers and
> thinkers have developed a mantra of defensive "exceptions", often defined
> largely in opposition to the practices of their supposedly "ultra-liberal" and
> "Anglo-Saxon" counterparts. It began with the "cultural exception" championed by
> Jack Lang, Mitterrand's culture minister in the 1980s and early 1990s, notably
> during the Gatt round to protect French cinema from foreign competition. He
> reinforced a long-standing cross-party belief in protectionism for domestic film
> and television production, supported by a network of quotas and subsidies. Today
> French "exceptions" have been labelled in practically every field.
>
> On paper such a diversity of approaches provides a welcome alternative to what
> the French call the pensee unique of one-track conventional wisdom. The problem
> is that the cult of exceptionalism is starting to appear artificial and
> counterproductive. Many of the elements that made France so distinctive and
> envied in the past are in reality being eroded. And many of those that remain
> appear increasingly anomalous and unfortunate.
>
> Two of the country's most eye-catching "exceptions" are also its ugliest: a rate
> of unemployment of well over 10 per cent, and 15 per cent or more support for
> political parties on the extreme right. They are also tightly intertwined. A
> high minimum wage, restrictive labour regulations and large social security
> taxes all help deter companies from hiring staff and contribute to creating an
> alienated class of people drawn to demagogic solutions to their problems.
>
> Jean-Marie Le Pen's National Front, as well as offshoots with similar
> ideologies, has fed off France's mainstream political class. When Mitterrand
> introduced proportional representation in the 1980s, it conveniently served his
> purposes by swelling Le Pen's support and dividing the opposition. The right, in
> turn, has played up its "republican" values to make it stand apart from the
> National Front's racist views, while abandoning to it in the process a welter of
> policies that would sit quite happily within the UK's Conservative Party, for
> example.
>
> One reason France has been reluctant to undertake the fundamental economic
> reform that might help ease unemployment is that it remains haunted by a third
> notable "exception", the revolutionary spirit of May 1968. It is one with which
> the defenders of France's exceptional ways feel more comfortable. Many consider
> the battles on the barricades of Paris less a brief historical aberration than a
> continuation of the traditions of 1789, 1848 and 1871. After all, the Communist
> Party still commands strong support among voters and sits in the current
> cabinet, albeit in ideologically neutered form. And, as the transport strikes of
> 1995 showed, there was considerable support for the protests well beyond those
> who were directly affected. As numerous truckers' and farmers' outbursts before
> and since have demonstrated, the state often appears too timid to interfere and
> restore order in the face of popular protest, regardless of the underlying
> rights and wrongs of the issue.
>
> The events of 30 years ago have helped create and consolidate a corporatist
> straitjacket that has outlived its useful life. For those in employment - and
> notably in the public sector - the special privileges won by the unions are
> impressive. But many of these achievements have been gained at the cost of the
> unemployed or those in the private sector. And while the unions serve their
> narrow sectional interests and between them represent just 9 per cent of the
> workforce, they continue to hold disproportionate power over national
> institutions, including the state's social security, medical and retirement
> organisations, labour tribunals and work councils. Managements, in turn, often
> take a conflictual approach to negotiations, which does little to help.
>
> The spirit of '68 also continues to legitimise another fundamental French
> "exception", the centuries-old national belief in the overarching importance of
> regulation and the predominant role of the state. According to the OECD, 27 per
> cent of the French workforce is in the public sector - higher than all other
> industrialised countries apart from Finland, Sweden and Denmark - with a wage
> bill to match. The Jospin government stresses the importance of maintaining
> service public a la francaise for the railways, the post office and other
> institutions, even though they often seem characterised by a lot more "public"
> than by high standards of "service".
>
> The continued power and prestige of the centralised Parisian state means that
> until recently it has been able effortlessly to recruit the "best and the
> brightest" graduates. In a country that still boasts a highly meritocratic
> educational system, the most talented people from a very broad variety of social
> backgrounds have reached the heights of the civil service, an institution
> internationally renowned for its efficiency and its ethics. But the system has
> also led to a very politicised approach to senior appointments. Ministers'
> advisers are frequently "parachuted" into positions as chairmen of state-owned
> enterprises, for example, despite their limited knowledge of the commercial
> sector and often scant management ability. The consequence of this system was
> epitomised at Credit Lyonnais, perhaps France's most costly "exception", which
> may require taxpayers to pay up to FF200 billion to cover the losses it incurred
> in the 1990s.
>
> There are many other, far more positive exceptions in modern French society. No
> one would dispute the delights of Gallic wine and food, literature and art,
> landscape and architecture, even if their uniting characteristic is that they
> have little direct link to the state or to public policy. The same can be said
> for many of France's most well-known and successful companies - whether the
> cosmetics group L'Oreal, the fashion house Chanel, the ballpoint pen and shaver
> manufacturer Bic or the tyre company Michelin. All are family-owned or
> -controlled and have kept as far outside the grip of the state as they possibly
> can.
>
> Above all, there is the high-speed TGV rail network, which, like other
> technological grands projets, never fails to attract the admiration of foreign
> visitors to France. It combined the country's strong engineering talents and
> bold visionary desires with an effective if ruthless capacity to implement.
> That, though, is a glory of the past, largely conceived and undertaken in the
> 1960s and 1970s. Perhaps what are most lacking in France today are just such
> bold, forward-looking projects, notably ones that focus less on technical skills
> and engineering achievements and more on social and economic reforms such as
> restructuring the imbalanced national pension scheme.
>
> It would be wrong to assume that no transformations have taken place in modern
> France. Jospin may have indulged in some extraordinary linguistic gymnastics but
> he has nonetheless pursued many policies that few who followed his words
> literally would have expected. Labour market "flexibility" is forbidden in his
> lexicon, but introducing "suppleness" has been permitted. Privatisation is out,
> but "opening of the capital" of state-owned companies is in. Pension funds may
> be viewed with suspicion, but "retirement savings" schemes are likely to be
> allowed. Similar sleights of hand affect his controversial 35-hour-week
> legislation. Whether this will create new employment is open to question, but it
> has forced France's notoriously rigid union and management representatives to
> the negotiating table.
>
> On the whole, however, the public sector has evolved far less than the private
> in recent years. Like their predecessors, the majority of members of both the
> National Assembly and Jospin's own cabinet are themselves former civil servants.
> That means not only do they have no experience of the private sector but they
> even have the right to demand to be rehired by their former government
> department up to six years after they have quit. That helps make them what the
> French call "de-responsibilised", removed from accountability or the
> consequences of their actions. Particularly as many national politicians also
> accumulate a range of elected positions simultaneously at local, regional and
> European levels - making it hard to imagine how they keep in touch with their
> multiple constituencies.
>
> Many French voters are also de-responsibilised, happily voting for new
> government spending because only 50 per cent of households pay income tax,
> compared with 90 per cent in the UK. Most state funding comes in the form of
> more "hidden" and regressive charges, and taxes on employers. There is also a
> disproportionate opposition to cutbacks by the state and sympathy for public
> sector workers on strike, since nearly 60 per cent of the French either are
> civil servants or have one in their close family. The same order of magnitude,
> unfortunately, also applies to the unemployed.
>
> If there are huge entrenched forces against change domestically, what is
> striking is that much reform seems to have come about as a result of external
> pressures. Is it a coincidence that Italy's "clean hands" campaign against
> political corruption came before France's or that several of the French judges
> who have been most active in similar clampdowns have been of foreign origin,
> such as the Norwegian-born Eva Joly? Equally, many of the economic changes
> happening in France today are the result of EU policies: whether liberalisation,
> privatisation or that great French grand projet, the euro.
>
> The French have long shown an impressive capacity to analyse a problem, come up
> from behind and overtake their rivals. They still have plenty of world-class
> ideas, individuals and businesses. They do not need to hide behind defensive
> "exceptions". They can cope perfectly well without efforts to restrict and
> vitrify the past. While the exceptionalists may disdain US-style food and
> culture, the majority have made France one of McDonald's biggest markets and
> Disneyland Paris the most frequently visited paying tourist attraction in
> Europe. They have created their own US-style restaurants and provided many of
> the most skilled cartoon animators for Walt Disney films. In these areas, as
> well as those which are their more traditional preserve, they have and will
> continue to provide a healthy and outward-looking Gallic contribution to the
> modern world.
>
> Andrew Jack's "The French Exception" will be published this summer by Profile
> Books. He is Moscow correspondent of the "Financial Times" and was previously a
> correspondent in Paris
A<>E<>R
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