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Sarkozy's Thatcher moment
www.economist.com ^ | 11/15/2007 | The Economist

Posted on 11/20/2007 7:11:15 AM PST by WesternCulture

Why Nicolas Sarkozy cannot afford to yield to French strikers

THE effervescent French president, Nicolas Sarkozy, has been on the road a lot recently—in Morocco, Chad, America, Russia and Germany, among other places. There has been much approving commentary about how French foreign policy has been freed of the reflexive anti-Americanism it so often bore under Mr Sarkozy's predecessor, Jacques Chirac. Yet for the future of his country, and of his presidency, Mr Sarkozy's foreign policy is not what counts most.

A far bigger test confronted Mr Sarkozy at home this week, as his much-vaunted economic reforms provoked a string of big strikes, already started by the rail unions and power workers, to be followed in short order by civil servants, teachers and even magistrates. This is being talked of as Mr Sarkozy's Thatcher moment. Parallels with the iron lady as she faced down Britain's coalminers in 1984-85 are inexact. Yet Mr Sarkozy is being watched closely in other continental European countries whose readiness to reform seems to have faded (German rail unions have also been on strike this week). More than the future of France is at stake.

The fearsome power of the French street has become the stuff of legend. Unionisation of the workforce remains surprisingly low—below British, German and even American levels. Yet at least since 1968 (some would go back further, to 1789), strikers and demonstrators have had an almost mystical status in France. In a political system that emasculates parliament and gives the president quite extraordinary power, public protests are one of the few avenues for genuine opposition. Yet the latest strikes are cruder in purpose than this observation implies. Far from representing a broad-based opposition, they stand for the narrow bloody-mindedness of vested interests determined to protect their excessive privileges.

Against this group Mr Sarkozy can marshal some strong arguments. His presidential campaign this year was unusually specific. He pledged to get France back to work, to scrap exorbitant public-sector privileges, to cut taxes and to set free a strangled labour market. He promised to end the “special regimes” that pay generous pensions to certain parts of the public sector, including the rail, electricity and gas industries. He said he would introduce a new law, due to take effect next year, to guarantee minimum levels of public service during strikes. Mr Sarkozy was admirably clear about his intentions, and he won an equally clear electoral mandate in May.

His proposals for reform were much more detailed than the vague ones Margaret Thatcher set out in her first election manifesto in 1979. They also represented a clear break with Mr Chirac, who did not run as a reformer in either 1995 or 2002. The truth is that Mr Chirac never really believed that radical change was necessary to improve the French economy and to cut unemployment. Mr Sarkozy does. Moreover, in contrast to the French people's tepid attitude in 1995, when Mr Chirac's first government tried to reform the special regimes for pensions, only to back down in the face of protests, the public now offers Mr Sarkozy firm support (see article). Often in the past the voters have, perversely, blamed the government, not the unions, for strikes and disruption—but not, so far, this time.

Mr Sarkozy has also chosen his battlefield with some skill. He wants to attack many privileged groups, but is starting with the most egregious. The special regimes are inordinately generous, allowing many workers to retire on full pensions at the age of 55, and some as early as 50. And, in yet another echo of Lady Thatcher, he has learnt from previous experience. In 1984 she knew that Edward Heath had, in the 1970s, twice taken on the miners and lost, leaving his government discredited, so she prepared the ground carefully for her own clash. Mr Sarkozy knows what happened to Mr Chirac in the mid-1990s and seems determined not to repeat his practice of offering unwise concessions, at least for now.

Don't give in It is those qualifying phrases—so far, for now—that are worrying. Voters can be fickle. Already Mr Sarkozy's popularity rating has fallen. The insiders who resist reform tend always to be more vocal and articulate than the outsiders who would benefit from it. And, although Mr Sarkozy has embraced the case for change, his instincts are not at all those of a free-market Thatcherite. He displays too many of the traditional French predilections: a belief in a big role for the state, a partiality for (often state-owned) national champions, a mistrust of the benefits of unfettered competition.

Above all, Mr Sarkozy is by nature a deal-maker, a man disposed always to look for compromise. Sometimes that is an advantage. But in the confrontation that he now faces, it is not. In the summer he watered down plans for university reform; he has just offered special tax breaks to striking fishermen. He cannot afford to back away similarly from his promised reforms to the public sector and the labour market, even in the face of prolonged strikes. It would be an exaggeration to say that this is France's last chance to change. But as the appetite for economic reform wanes across Europe, it is the last that is likely to come for a long time.


TOPICS: Business/Economy; Culture/Society; Government
KEYWORDS: economicdevelopment; economy; eu; europe; france; sarkozy; strikes; unions

1 posted on 11/20/2007 7:11:17 AM PST by WesternCulture
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To: WesternCulture

“Don’t give in”


2 posted on 11/20/2007 7:32:44 AM PST by mad puppy (I'd rather live a day on my feet than a year on my knees)
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To: WesternCulture
He should announce that he wishes to ‘privatize’ these services. That is, bid these services out to private contractors if the strike is not resolved quickly.

Either way (strike ends or the services are privatized) the country would come out a winner.

3 posted on 11/20/2007 7:40:25 AM PST by NeilGus
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To: WesternCulture
Like the article above points out, (French) “unionisation of the workforce remains surprisingly low — below British, German and even American levels”, still, the problems Sarkozy presently confronts has a lot of common with the situation Thatcher had to deal with:

- To begin with, in the 1970s and 1980s, Britain was a crippled economy characterized by mass employment, high inflation and widespread stagnation. By today, French economy has been in a state of stagnation for more than 15 years.

- In many parts of the UK, especially in the northern parts, the standard of living declined. Cities like Liverpool, Manchester and Newcastle fell into decay. To some extent, there is the same urban phenomena in today’s France. Although many parts of Paris still is prosperous, the large immigrant ghettos surrounding the French capital are in a miserable state from every point of view. Marseille, the second largest city, suffers from similar problems although unemployment has fallen from 20 percent in 1995 to a rate of around 12 percent today.

- In the case of Britain, large segments of the British workers and especially the union leaders reached the conclusion that the best way to fight economic recession was to launch massive strikes. This insanity just went on and on and among other things, these actions played a major role in the demise of the British automotive industry. In France of today, strikes are more of spontaneous reactions. On the other hand, the attitude of the French strikers are the same as that of their British counterparts of the 1970’s and 1980’s; by refusing to work, they think they will somehow manage to create better living conditions for themselves.

It is now up to Sarkozy to make the French workers realize that continuous strikes DO NOT lead to economic growth, increased investments, better work conditions and a higher
standard of living.

In the end, Thatcher was successful and I’m convinced Sarkozy will be too.

This article, entitled ‘Enemies within: Thatcher and the unions’, sums up the era of the ‘Iron Lady’ in competent manner:

http://news.bbc.co.uk/2/hi/uk_news/politics/3067563.stm

4 posted on 11/20/2007 8:10:55 AM PST by WesternCulture
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To: WesternCulture
From your link.

As she famously - and controversially - framed the dispute at the time, "We had to fight the enemy without in the Falklands. We always have to be aware of the enemy within, which is much more difficult to fight and more dangerous to liberty."

In our case, the enemy within is the American Left and the Democrat party.

5 posted on 11/20/2007 8:50:19 AM PST by Donald Rumsfeld Fan (NY Times: "fake but accurate")
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To: Donald Rumsfeld Fan

“In our case, the enemy within is the American Left and the Democrat party.”

- I agree.

In a time when a lot of Europeans are growing tired of Socialism, massive immigration and irresponsible politicians, several American Liberals and Socialists wish the US to become more like Europe.


6 posted on 11/20/2007 10:04:23 AM PST by WesternCulture
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To: All

With any luck and a bit of skill, maybe President Sarkozy can turn his Thatcher moment into a Reagan Moment, recalling the fate of the air traffic controllers who decided to strike in 1981.


7 posted on 11/20/2007 12:27:28 PM PST by DPMD
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To: DPMD
“With any luck and a bit of skill, maybe President Sarkozy can turn his Thatcher moment into a Reagan Moment, recalling the fate of the air traffic controllers who decided to strike in 1981.”

- I recently saw a program on Swedish TV that, among other things, featured how Reagan dealt with that (illegal) strike.

Despite the fact that it was sent over here in ‘Socialist’ Scandinavia, it actually portrayed Reagan as a competent president and also as a very resolute, honorable and admirable man, which he indeed was.

Maybe most of us here in Europe will one day also understand why the WOT is a necessary thing.

8 posted on 11/21/2007 9:19:02 AM PST by WesternCulture
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