The Hindu Business Line : France's fresh blast of oxygen

France's President-elect, Nicolas Sarkozy, deftly and unhesitatingly plugged hard work and its rewards into the core of his agenda for governance. Ambition and hard work formed a potent force that worked well for him. More than half of France voted for him because they think the same combination will work well for them too, says G. RAMACHANDRAN.

Mr Nicolas Sarkozy, elected France's 23rd President, is the oxygen that more than half of the nation has been waiting for. He is the oxygen that most of Europe has been waiting for too. It is now up to Mr Sarkozy to blow fresh air into France's colourful but diffident society.

Mr Sarkozy will indeed do just that. Why? He has promised to do just that. He is provocative. He is abrasive. But he is ambitious, determined and earnest. It is expected that he will soon direct the nozzles of oxygen at France's faltering economy. A new glow will follow and this will be good for France, Europe and the rest of the world. Those that are bitter over the economic and political influence of the United States will cheer France's renewal under Mr Sarkozy.

Welfare before work

France's economy has never been short of fuel. It has human talent and the physical resources — in that order — in great abundance. It has its vineyards and a never-ending flow of tourists. It has Cannes and the Mediterranean. Its public infrastructure — even today — is the envy of all, including the Britons. But over the last 25 years it has been woefully short in inspiring and crafting the best usage of all these resources.

France's problem lies in confidence and combustion. It has shown little enthusiasm to expose its society and vast resources to a constant and unabated flow of oxygen. Its political leaders were unwilling to push the French into creating wealth through work, innovation, resourcefulness and risk-taking.

They — even those from the centre-right — took prosperity for granted and turned their attention to distributing prosperity through a series of welfare measures. Their focus was on distribution of wealth than on work and wealth creation. As a result, they pushed France into economic and social decline. Its per capita income was ranked eighth in the world in 1990. By 2000 it had slipped to eighteenth.

France's social decline is the result of its economic decline. Its economic decline is the result of the massive enterprise deficit since the late 1970s. This deficit in enterprise, private initiative and risk-taking has made it difficult for the assimilation of the second generation of immigrants' children into the mainstream. They are neither a part of France's system of entitlements nor are they a part of the labour market. Their fiery burst of frustration and despair in November 2005 was the result of France's putting welfare before work.

Work before welfare

Mr Sarkozy is the son of a Hungarian father who fled Communism to settle in Paris. He is an immigrant's child and it is unsurprising that he claims to know what works best for those that lack entitlements. His history of accomplishments shows that ambition and hard work create a potent force that has worked well for him. More than half of France voted for him on May 6 because they think the same combination will work well for them too.

Mr Sarkozy deftly and unhesitatingly plugged hard work and the necessary rewards for hard work into the core of his agenda for governance. He presented the agenda with clarity and simplicity. His agenda carried conviction and it stirred confidence. He had personal experience to show as proof. And, of course, he had the consummate skills of a lawyer. Mother's milk has magical properties; he owes his mother a debt of gratitude. She was a Parisian lawyer.

He has promised to exempt overtime (above 35 hours) from taxes and social security charges. He thinks it is smart to allow people to work more than 35 hours if they wish. He thinks it is fair to allow workers to retire at the age they want. He also thinks it is wholly just to withhold as well as to remove benefits from those who turn down work.

He has promised financial assistance to those who want to move from state-owned housing to homes that they will buy. They can pass on their homes to their children and he has promised to exempt almost all from inheritance tax.

Regally out of touch

By contrast, Ms Ségolène Royal, the Socialist presidential candidate and Mr Sarkozy's rival, set out an agenda that was very seductive and wholly out of touch with reality. Ms Royal had promised to raise the minimum wage by about 250 euros to 1,500 euros per month. The 35-hour work was a must, she said. The French should not work in excess of 35 hours a week. Work is for ordinary people — perhaps for the Irish and the British. Work does not go well with the aristocracy.

Ms Royal's agenda was aristocratic in intent. It made work irrelevant; it made hard work dispensable. It made rewards, allowances and entitlements a certainty. It put government's stamp of approval on the pursuit of leisurely pleasures in unemployment. Ms Royal thought it was cute to make unemployment attractive by promising the jobless 90 per cent of their salary for the first year of unemployment.

She also promised to raise the basic state pension by 5 per cent. Further, Ms Royal promised to build 120,000 new state-owned homes annually. She also put into play a ceiling on private rents while promising the grant of lifelong guarantees of housing.

Fruits for plucking

The Bastille was stormed on July 14, 1789. The storming signalled the beginning of the ordinary citizen's revolution in protest against the tyranny of the aristocracy. But France's Socialists have not thought it fit to discard the trappings of unearned aristocratic living.

Such trappings and the 35-hour week have made them completely out of place. So, it is not surprising that Ms Royal lost the race. But what is surprising is that she finished with 47 per cent of the votes. That is big for a loser.

Ms Royal's rival, Mr Sarkozy, got 53 per cent of the votes. That is small for a winner. Mr Sarkozy did not finish with, say, 75 per cent of the votes. This says something about France and how the French have come to view incomes and prosperity as fruits that can be plucked at the vineyards and the orchards.

This also explains why Mr Jacques Chirac did not and could not accomplish much as France's President since 1995. Mr Chirac neither had the stomach nor the taste for reform. Yet Mr Chirac was re-elected in 2002, but he is as much Gaullist and centre-left as Mr Sarkozy is. France's Presidents had a seven-year term until Mr Chirac cut it to five.

During Mr Chirac's two terms in office, average unemployment has been over 10 per cent. France's per capita income was overtaken by both Britain's and Ireland's. Public debt rose to 66 per cent of national income; it rose the fastest in the European Union (EU). A tired and failed Mr Chirac would have gone on to sap France until 2009 if it were not for his generous initiative. France would have sapped the EU as well, since France is the EU's second biggest economy.

So what's new?

Mr Sarkozy's popularity and success can be traced to the alignment of the centre-left in 2002. Before the 2002 presidential campaign, the supporters of President Chirac were in three different right-wing parliamentary parties. To make possible the re-election of Mr Chirac, they founded an association and named it the Union on the Move (Union en Mouvement).

France's presidential election in 2002 was followed for the first time as due process and by design by the legislative election in June 2002. This became possible after the term of the presidency was cut to five years. The Union on the Move became the Union for the Presidential Majority (Union pour la Majorité Présidentielle). It was renamed Union for a Popular Movement (Union pour un Mouvement Populaire, UMP). Mr Sarkozy has been president of the UMP since 2004.

The UMP is a new party with a realistic leader that knows France has little time to lose with policies that are patently outdated. Mr Sarkozy also knows that the UMP has to win the legislative elections in 2007 and then carry all of France with him. It is the newness of the UMP that will help him and France.

(The author is a financial analyst. Feedback may be sent to indiagrow@yahoo.com and pari@thehindu.co.in)