France is going backwards, Le Pen is going forwards, Italy is going nowhere, and the Brits just want to go.
France’s insuperable problems are still by far the most likely to unravel the EU and its currency….as well as push Merkel to the East. The Slog analyses why ‘most likely’ has become a certainty.
Anyone here on the ground in France is acutely aware of just how dire the private sector’s performance is at the moment. The most obvious example of this is in the multiple retail sector, where the drop in prices has now spread even to cheap foods. Everything here in France is on offer….and has been on constant offer since April. The Folie du Printemps turned into the Foire de l”Ete, and today the signs just say Solde! Solde! Solde! in huge letters everywhere.
Comparing French prices to those in neighbouring countries – and this general rule applies to everything from flights to tools via paint and even mousetraps – French goods for export are expensive. So are French workers at home. Worse still, French delivery times remain woefully long and frequently unreliable. In a nutshell, exports have collapsed, and it’s easy to see why: imports from other EU countries are cheaper, freely available, and better made.
Tax receipts too are in a bad way, a crisis to which (it seems to most foreign residents) President Hollande is oblivious. The reasons for the shortfall are more workers being paid in cash (tax free and at lower rates), a flatlining economy, and not least the archaic (and arcane) collection system.
In France – you may find this hard to believe, but it’s true – the job of tax calculation and liability is largely given to Notaires – legals – when things other than basic salary are under consideration. After 13 months of trying to get two separate Notaires to agree to a simple share transaction between my estranged wife and I, we have given up and decided to have Jan pay the tax in England. When things came to a final impasse (after long periods of what appeared to me to be sheer incompetent idleness) the Notaire’s office simply said, when told of our intentions, “Je m’en fou, we can’t take the risk”. Risk?
Thus, one attitude just cost France a delayed tax payment, which has turned into no tax payment. But obduracy about the silly nature of tax decisions – for example, demands that entrepreneurs pay upfront, and the astonishing level of social benefits – are a serious obstacle to French growth. The only thing growing in France is the public sector….and it is out of control. I’ve been posting for nearly five years now about the splurge of infrastructural spend on everything from road surfaces and signage to Mairie restoration. What’s more, eccentric French definitions of ‘public’ and ‘private’ massively underestimate the real size of the State.
Sarkozy infamously promised that France would “feel the pain” but the public sector has clearly been given the keys to the paracetamol cabinet. Hollande is under pressure from his fellow Eunatics to reform: but the politics and practicalities of doing so are beyond the man.
If you think you can hear the Troikanauts slavering at the bait and straining at the leash, forget it. The neoliberal scammers would love to position the French mess as very much a job for them to solve, but this is not Greece. The syndicats and Nationalists would ensure that, beyond any notable level of interference in French internal affairs, bondholders would be heading for the tumbril…..and an appointment with Madame la Guillotine. Somehow, I doubt if Notaires would be consulted during the process.
In truth, there are two fundamental problems France faces that are far more important than any other consideration. First, the bureaucratic feather-nesting and self-protection; and second, the gross lack of productive jobs as French goods – like British goods and Italian goods – fail to compete. The two are connected – held together almost – by the bindweed of unemployment. But bindweed throttles everything in the end.
Last month, the jobless totals fell by 11,000 – 0.3% of the working population. That’s August…a time when seasonal tourism and farm jobs come into their own here. It is the only month this year that has seen a fall, and not even PS politicians are seeing it as a lifeline. The French are hazy on ‘new jobs’ largely because there aren’t any.
In the light of this, employment group Medef has called on the Government to scrap its 35-hour work week, raise the legal retirement age and lower the minimum wage to bring down chronically high unemployment and stimulate growth. Medef believes such moves would create a million jobs over the next five years; they just don’t say how. the plan will fail as long as bureaucratic, bloody-minded obduracy remains as the hard face of protected interests in the legal/functionnaire sector. And as long as there are moves in hand to cut worker benefits, strike and transport chaos will surely follow.
In short, it’s the usual list of suspects: those who produce nothing – lawyers, notaires, bureaucrats, tax offices, union leaders and politicians – have combined to create the system, and then ensure nobody has the power or balls to deconstruct it.
There is an obvious way round this, but it would involve the lower paid and the Hard Right working together in order to push through radical reform that would benefit both sides. Lest we forget, they are in a large percentage of cases the same people. One dislike in particular unites them: Muslim immigrants.
France has around 7 million immigrants – roughly 11% of the population. Of these, a staggeringly high percentage are Muslim North Africans – 6.5 million, or just over 10% of the population. Yet this 10% receive 22% of all social benefits. In total, the deficit from immigration shouldered by the taxpayers is estimated to be €26 billion. Such figures are freely available because, unlike in pc-ridden Britain, the Government publishes them – and others take advantage of it.
So for racists, this is fertile ground: and to the trade unions, it’s an obvious threat – especially given that an estimated 500,000 immigrants evade tax by working on the noir – a loss to the State of €4 billion. Many French ouvriers now grumble that their jobs are threatened by Muslims because their benefits costs are so high, but the State gets nothing in return. This is erroneous on two grounds: first, the great majority of noir workers are English or Polish; and second what makes French workers expensive is the degree of assurance they want the employer to pay.
But what in turn unites the Front Nationale, the farmers, industry and the Unions is a detestation of bureacratically bloated procedures that mean higher costs, slower reactions, and a regime generally unfriendly to start-ups. This is where Le Pen will score across the board, by presenting the problem as Brussels as much as France-based.
All of the above presents Brussels-am-Berlin with a problem I now believe to be insoluble – for the following reasons:
1. France is the EU’s second biggest economy. Italy is the third. Without a dramatic solution, sooner or later both will default. Italy is now showing obvious signs of a descent into chaos; for the reasons outlined in this think-piece, France could do the same on social, political and economic dimensions. There is no way either the EU or the euro could survive these events in anything like its current form.
2. If Marine Le Pen wins the next Presidential Election, she will immediately begin negotiations to withdraw from the EU, and change the immigration laws dramatically. She already claims that B-am-B is lying about the facility to withdraw from both the Ezone and the EU: she says it exists, and she will exercise it.
3. Having tried the bonds raid once already to bring Hollande into line, the Wall Street/Brussels manipulators now need to be careful what they wish for: such an attack could easily get out of control, and produce at least one collapse in the French banking system.
4. As things become economically worse and more politically uncertain, there will be a capital flight which, at some point, will turn into a panic attack. Such would have terrible economic recovery ramifications for l’Hexagon, but more immediately put the ECB into a position where it found itself in very deep waters indeed. To replace that capital with support would bring the German Constitutional Court and the Bundesbank roaring out of their cages…and require printing by Mario Draghi on a hyperinflationary scale.
5. At the first moment that France is seen as able to face down the Eurocrats, I think we can be sure that Italy for certain, probably Greece and possibly Spain – Catalonians and Andalucians especially – will begin agitating for an end to Big Centre, top-down fat Government from Brussels. I think it also highly likely that anti-German feeling will increase further.
6. From my own parochial standpoint, if any of the above began to roll before May 2015, I think we would wind up with a disastrous Left/Right stalemate in the UK, with Labour as the largest Party and UKip securing big gains from the Conservatives. That would be the end of Camerlot, which would be eclipsed by the harder-edged europhobes. The two sides Miliband and (Boris?) would be utterly incapable of working with each other.
It would be a miracle if Chancellor Merkel was not adding such thoughts to others about which I posted three days ago. And it all points in the same direction: closer to Moscow, with an economic future in Asia.
I’m still no nearer to getting a handle on what the grown-ups are preparing in Berlin, but I can tell you this: the French love affair with je m’en fou is stronger than any ideas they might harbour of a powerful Europe. France has and always will come first for the ENAs who – unlike the average cement-head tax inspector – do on the whole tend to plan ahead on energy, food and road infrastructure development.
If a Gallic “Go f**k yourself” were to bring down Brussels-am-Berlin, I would of course be a very happy bunny. (I’d also be in schtuck, because my health insurance would dispappear, but that’s a minor point). But once that’s achieved, and the economies of Europe start emerging from the wreckage, there will be no place for any of the corrupt professions, obdurate functionaries, or politicians seemingly capable of incontinence and impotence at one and the same time. Fat bankers and globalist headcases will also not be required on voyage.
However, the biggest thing France will have to eradicate is Je m’en fou.