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Sarkozy wants France to be more like Germany

The Local · 15 Jan 2012, 11:24

Published: 15 Jan 2012 11:24 GMT+01:00

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The right-leaning leader will on Wednesday host a "social summit" with unions and employers to try to make France's job market more flexible and halt rising

unemployment ahead of presidential and parliamentary elections this year.

Sarkozy is hoping he can emulate the so-called Hartz labour reforms of 2003 to 2005, which are seen as having helped Germany escape the economic crisis

currently gripping most of Europe.

But this is just one of the many pages that France hopes to borrow from Germany's economic textbook.

Earlier this month Sarkozy's government vowed to cut payroll charges on employers and workers to try to make French firms more competitive, and to recoup the revenue mainly by raising value added tax.

The countries with this so-called "social tax" most cited by the government are Denmark and Germany, where it was introduced in 2007.

Budget Minister Valerie Pecresse said it was worth copying Germany's move to reduce labour costs because this had enabled France's neighbour to reduce

unemployment and remain Europe’s biggest exporter despite the crisis.

Sarkozy also hopes to follow Germany's lead and introduce a "golden rule" for French government budgets, which would oblige future governments to borrow only to invest and not in order to fund current spending.

Sarkozy occasionally has spats with his German counterpart Angela Merkel. They have had seriously different ideas on how to resolve the European debt crisis, for example, and Sarkozy has most recently irked Merkel by vowing to go it alone in introducing a financial transaction tax.

But the French leader clearly thinks his country has a lot to learn from a neighbour with which it has fought three wars in the past century and a half.

Jean-Louis Beffa, former boss of French building materials giant Saint-Gobain and author of La France Doit Choisir (“France Must Choose”), which argues the country must change its economic model to survive, agrees.

"France, with respect to the management of companies, has fallen into the clutches of the ideological principles of Anglo-Saxon capitalism, which is to

say the primacy of the shareholder," he said.

France should instead adopt the German industrial model characterised by close cooperation between unions and management, an emphasis on vocational

training, and closer links between financial and industrial sectors, he added.

The German economy does show signs of slowing down – it shrank slightly in the fourth quarter of 2011 – but overall for the year it grew a healthy three percent, making it one of its best years since the country was reunited in 1990.

INSEE, the French national statistics office, says it expects France to fall into a brief recession, with the economy contracting 0.2 percent in the three months to December and another 0.1 percent in the first quarter of 2012.

German unemployment is at its lowest level in 20 years, at 7.1 percent, while in France the number of jobless – at nearly three million – is at a 12-year high, at 9.8 percent.

The French government predicts that its public deficit – the shortfall between tax income and spending – for 2011 will be 97.2 billion euros, or slightly lower than its target of 5.7 percent of gross domestic product (GDP).

Germany managed to bring its public deficit down to just 1.0 percent last year, from 4.3 percent the year before.

Sarkozy's "social summit" next week is a major plank in his bid to narrow the yawning gaps between the French and German economies.

A central measure to be discussed will be new rules that would allow firms to adjust to an economic downturn by cutting workers' hours instead of laying

them off.

A major reason Germany has managed to keep unemployment low is the use of Kurzarbeit ("reduced working hours"), a system that allows firms to reduce workers' hours, with the government making up some of their lost pay.

However Pierre Larrouturou, an author and political commentator, warns against blindly copying Germany's methods.

He said the German model has many positive aspects but argued that the labour reforms there may have made the country's firms more competitive but

left most Germans with reduced spending power.

He pointed to a growing underclass of badly-paid workers who have benefited little from Germany's strong economy, and noted statistics that show that German real gross wages declined by 4.0 percent between 2000 and 2010.

"Competitiveness is like cholesterol – there is good and bad, as (Nobel-winning economist Paul) Krugman said," noted Larrouturou, whose latest

Story continues below…

book is titled Pour eviter le Krach ultime (“How to Avoid the Ultimate Crash”).

"Training workers, inventing new products, getting up in the morning and conquering more market share, that's all good. But lowering everybody's

salaries is very dangerous," he said.

Sarkozy's hopes of introducing Kurzarbeit in France is likely to run into opposition from unions who are already objecting to any reform that might hit

workers' pockets further.

Standard & Poor's downgrading of France's top triple-A credit rating has further complicated matters for Sarkozy because the agency left Germany's top rating intact.

"Being downgraded along with Germany would not be a downgrade, just a shift in scale," wrote Arnaud Leparmentier, a political journalist at Le Monde newspaper.

"But now Nicolas Sarkozy's politics, which consist of presenting France as Germany's alter ego, have collapsed," he said.


The Local (news@thelocal.de)

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Your comments about this article

14:37 January 15, 2012 by Englishted
"Sarkozy has a plan to save the country, by making it more like Germany."

But it is like German ,it makes war on England and loses.

Please don't take it to heart , only a little messing around.
15:28 January 15, 2012 by JCBearss
Sure let's start with the Alsace first and work our way west didn't we do this one before?
15:46 January 15, 2012 by raandy
Sarkozy is taking a big step here. I give him credit for his willingness to look elsewhere for good sound economic policies that could benefit his country.
19:40 January 15, 2012 by ovalle3.14
Be careful what you wish for. It might actually come true.
20:58 January 15, 2012 by Steve Potts
Ah the Euro wants to speak with one voice.
10:04 January 16, 2012 by HelloOutThere
@ Englisthed:

You mean Germany making war on England, France, the U.S. and the former Soviet Empire and the English actually being saved by the French resistance, U.S. American and Canadian soldiers, Russian soldiers, even Scottish soldiers and other soldiers from their (former) colonies... (deep inside your soul you English know the truth)


Best regards
11:19 January 16, 2012 by christopheuk25
The poison dwarf has lost it completely,He will be gone come the next French election and he knows it,Merkel knows this too.
12:49 January 16, 2012 by dxlman
The French could never be like the Germans, for one, the French don't like working more than 35 hours a week, and use any excuse to down tools to go on strike.

Ultimately, the French are too lazy to have a good work ethic!
13:17 January 16, 2012 by LecteurX
@ dxlman - great insightful comment. So informative, so brilliant.

"The French don't like working more thant 35 hours a week" - well you'll find many of them do, as it's paid overtime, and in these days of economic turmoil many people actually take that gladly.

"Ultimately, the Frenc are too lazy to have a good work ethic" - Don't know, maybe France built the 6th largest economy just by sitting around and drinking red wine, what do you think?

Ultimately, you are too stupid to have anything interesting to say.
16:38 January 16, 2012 by b-c
"Working less" is exactly what most people wish they'd done in their lives, laying on their death beds. Go figure. Spend time with your loved ones, you won't regret it. Work less, you won't regret it.
17:44 January 16, 2012 by HelloOutThere
@ b-c: I suppose that's exactly what the Greek thought before their country collapsed and drowned in debt. But what do you do when there is no one else to help you out? Then you will regret that you did not work when you should have done it... and I think that you will not have a happy time either.
19:02 January 16, 2012 by LecteurX
HelloOutThere - WHEN people like you will finally learn??? The Greeks are the European nation that clock up the longest working hours annually, coming only second to the Romanians. There's currently an article by the Local stating exactly this...

Why having a go at the Greek who, seemingly, have nothing to do with this article? I think the Greek problem has little to do with not working enough (or maybe they did retire a bit younger than other Europeans, but after a life of hard work).
20:17 January 16, 2012 by HelloOutThere
Sorry LecteurX, but WHEN do people like YOU finally see the truth? There are many people who seem to think that (official) working hours are the same as productivity, but unfortunately THEY ARE NOT. If so the Greeks, Spanish and Portugese would not have that much problems.

The Greeks themselves stated that they are not as productive as the Germans at all.

Let me give you an example: When somebody works ten hours a day, but effectively only uses two hours of his time at work for whatever reasons he will not be as productive as someone who works for six hours a day, but does actually effectively use these six hours.

And that's exactly the problem with the Greek economy. Even the OECD recently stated that Greece does not have the competence to establish a competitive economy, the need some help from outside with that.
13:09 January 17, 2012 by ChrisRea
@ HelloOutThere #14

LecteurX did not say that Greeks are producing more, but that they work long hours. Of course the productivity comes then into the equation. A driver using the roads in Romania will be less "productive" in km than one driving on the German Autobahns. An unqualified worker will most probably produce less value than an engineer, even if he works more than the latter.

Greece is drowned in debt because many of its systems are not working (extremely poor tax collection, highly corrupted politicians etc). Speaking only about tax collection, the famous case of swimming pools is probably the best example. €15bn total loses to tax evasion is a huge number for an economy with a GDP of about €215bn.

So Greeks have definitely problems, but not that they are lazy.
14:20 January 17, 2012 by HelloOutThere
@ ChrisRea:

How do you define "being lazy"? Let us both agree that they seem to have a different mentality with respect to work ethics when being compared to Germans and other middle/Northern European countries.
22:23 January 17, 2012 by Whipmanager
I saw this article and knew I had to read the comments, as they would be much more entertaining than the actual article:

I knew Nazis, and WWII would come up, that the french were able to get it together, and then there were soem insightful comments.

Note that they claim that Sarcozy is right Leaning, I can't see how his leaning in this article is pertinent but that is an over characterization of this person. I guess if everyone in a country is communist (overstating) or Socialist, then anyone using a word like Industriliazation in their policies must be right leaning. The fact is this: When Thatcher and Reagan and Kohl were running things (A much farther Right leaning group) things were in better balance, the world economy had less problems. The problem , while maybe hinted a bit, is that Left Leaning has taken over, and it seems that Sarcozy is being measured by the Lenin or castro stick. He is farther Right then they are, but not enough to make a difference. Capitalism is right, it balances things out. Add in protective tarrifs (no one wants to hear that word, but China is taking advantage of our unwillingness to make things equal) and you start to have parity with each country. Bringing parity, then the quality aspect will come into play as no one wants to pay more fo rless quality. Once Quality comes in to play, you will see a natural balance take place. trade will equal out and the US, Germany, France, Brittain, and maybe India and China will then be competing in a healthy atmosphere where quality makes or breaks you.

You need more reagans and thatchers. I don't know the last good leader France had, but Miterand was just a russian lacky, and any Italian leader was much worse. Jose Maria Aznar had a chance, but the Socialists ( Braga and his ilk) had control of the parliament and put him in Check. Spain's Ruiz Mateos has the plan, askl him for it.
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