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Regarding The Day that France went Bankrupt
Imagine the scene: two billionaires are bidding at an auction in Paris for the worlds most famous painting. The Russian oil tycoon loses his nerve at £189m and the auctioneer bangs his gavel. The Mona Lisa has been sold to a grinning Chinese textile baron. Frances humiliation is complete.We are in 2013. The states coffers are empty and the French have been reduced to selling off their family treasures to make ends meet. The Day that France went Bankrupt, a novel by Philippe Jaffré, a former Treasury director, could serve as a warning about the dangers of big government to Ségolène Royal, the darling of the opinion polls concerning next years presidential election. In Jaffrés book, Royals victory sets in motion a chain of events that leads to France going broke and suffering the indignity of having to beg for help from the International Monetary Fund (IMF), which imposes draconian economic conditions. The culprit in all this is Frances public debt. It has grown to 66% of GDP, compared with 43% in Britain, as a result of the cost of maintaining the countrys bloated bureaucracy and lavish social welfare system. It will impose a heavy burden on the next generation. No wonder the other recent addition to the doom-laden library of French declinism as the dark days to come doctrine is known was called Our Children will Hate Us. So attached are the French to the fat of their state, however, that few politicians would dare to suggest trimming it, particularly with the elections approaching. On the contrary, Dominique Strauss-Kahn and Laurent Fabius, two Socialist rivals of Royal, have been promising to increase spending on welfare as the battle for the Socialist party nomination, to be decided in a vote next week, reaches its climax. Royal has also vowed to defend the welfare system. Although the public adores her, she is under a cloud of suspicion in the Socialist camp for voicing admiration for Tony Blair, whose relatively moderate policies are anathema to most French Socialists. Even Nicolas Sarkozy, the most likely candidate from the centre-right, has gone quiet on reform. He likes presenting himself as the candidate of rupture with the past, but the painful spectacle of Dominique de Villepin, the prime minister, failing to get even a modest employment reform past the barricades of angry student protesters may have put him off. All of which fuels the declinologist gloom: beyond a parable about the perils of public spending, some see in Jaffrés book an illustration of the growing belief that France can advance only through serious upheavals. In the novel, Royal is thrust into an uncomfortable coalition with the Greens after they end up scoring well in parliamentary elections. She makes a bold stab at reform after appointing Strauss-Kahn as prime minister but is forced to retreat after protests and strikes, a familiar pattern in French politics. She resorts to the standard French political reflex of spending her way out of trouble; by the time Sarkozy wins power in 2012, half of the states revenues go on servicing the debt, which has risen to 180% of GDP. The crisis is triggered when Standard & Poors, the debt rating agency, relegates French debt to the status of junk bonds. The banks are no longer prepared to lend France any more money. In short, France is broke. The stock market closes and so do the banks. In the resulting chaos, thousands of French tourists are left stranded around the world when their credit cards stop working. Once the boss on the European block, France goes cap in hand to its European Union neighbours for help and the Germans are not alone in experiencing intense feelings of schadenfreude at the spectacle of French officials grovelling. Some countries, including Britain, decline to contribute to the bail-out, arguing that France has only itself to blame. Others will come to the rescue only if an austerity package is implemented under the supervision of the IMF. The IMF seems to take perverse pleasure in making the terms particularly harsh. In the first year of the adjustment, production plummets and unemployment rises. The growing poverty fortifies the far right and gives rise to a radical new Socialist party. It does not stop the relocation of the Mona Lisa to Shanghai. Sarkozy, in particular, has every reason to hope that fiction remains fiction. The last straw for his character in the book is when, at the end of a state visit to America, he is prevented from taking off in his plane back to Paris. A judge acting on behalf of a creditor has ordered the seizure of French assets, including the presidential Airbus. Posted by: ryuge 2006-11-05 |
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