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Eric Margolis

Eric Margolis

Posted: October 25, 2010 03:36 PM

PARIS -- Turmoil continues in France after weeks of inconvenience and even agony inflicted by public service unions on the long-suffering public.

Strikes, demonstrations, and blockages of fuel deliveries continue here in Paris, and across France. However, the protests and strikes this week are not as intense as the ones over past weeks. But are promised this month and until year end. More disruptions of ground, underground and air travel are threatened.

A third of France's 12,000 gas stations are low or out of fuel. Unions have blocked France's most important entry point for petroleum at Marseilles.

President Nicholas Sarkozy's increasingly tough-sounding government is using its head-bashing CRS riot police to break the oil blockade, further provoking the union's anger.

Read Britain's tabloids, and you'd think France is ablaze with rioting and chaos. London's sensationalist media loves to trumpet bad news about the French.

In fact, things are reasonably calm here, except for angry motorists, a few big, noisy, but non-violent union rallies, and scattered vandalism by young street hoodlums. Amazingly, up to 70% of the French public still expresses sympathy for the striking unions.

While France's protests are over plans to raise the minimum retirement age from a laughably low 60 to 62 (67 years is the EU average), the deeper cause is fear of much deeper spending cuts the center-right government will be forced to make.

Students have also begun joining the demonstrations, half as a lark to escape classes, but also, they claim, out of fear that a higher retirement age will delay job openings for the young. France has one of Europe's highest youth unemployment rates. French schools and universities are also remain hotbeds of leftist ideology and anti-business sentiment.

President Sarkozy, facing mounting political challenges from the left and from his own party, vows to cut France's deficit from 7.7% of GDP to 6% in 2011. This is still way above the EU maximum deficit target of 3%.

Sarkozy assumes the G20's presidency next month. He hopes to use the post to raise his battered image at home and abroad. But the strikes, and the possible entry of Socialist grandee Dominique Strauss-Kahn, who currently heads the IMF, into the 2012 president race against Sarkozy has the president deeply concerned.

Many French realize their comfortable welfare state has become unaffordable, and austerity unavoidable. The biggest problem is the powerful public sector unions.

Though only a minority of workers, these militant unions are the mailed fist of the left. They can paralyze France and bring it to its knees. The most powerful union, the CGT, has deep Communist roots and is determined to continue the bitter, century-old class struggle between France's left and right.

France's past governments have usually backed down in the face of labor challenges or compromised. This time, however, Sarkozy says he will fight to the finish to smash the power of public unions holding the nation to ransom. This goal is backed by many French, but Sarkozy has become so unpopular due to his very un-French style and stridency that many moderates have turned against him.

The rest of Europe is watching France's conflict, knowing they will face similar struggles when forced to slash government spending and reduce unsustainable deficits.

Meanwhile, across the Channel, France's ancient rival, Great Britain, has unleashed a genuine revolution. The new Conservative-Liberal Democratic coalition of David Cameron and Nick Clegg announced this week massive cuts in government spending of 8%.

Chancellor of the Exchequer George Osborne says the bloated welfare state created by the previous Labour government will shrink drastically. He warned Britain's structural debt is Europe's highest and must be sharply reduced. As a result, 490,000 government jobs will be eliminated, military spending slashed 8%, and retirement raised to 66 by 2020. Middle-class welfare is to be ended.

This biggest budget cut since World War II has left Britons dazed and shaken. But so far, aside from a few minor protests and howls of agony from the left, the nation remains calm, unlike its French neighbor.

The new government in London was wise to make these huge cuts swiftly and mercilessly. Contrast British decisiveness to France's dithering and stalling over its minor retirement age increase.

Of course, well-behaved Britons don't erect barricades, block seaports and airports, and stage massive riots -- at least not so far. Except, of course, when they watch football games or go on holiday to Spain, engorge vast quantities of beer, and turn into later-day Vandals.

Britain's ruling coalition inherited an awful mess from the prodigal Labour Party that must be rectified lest Briton face a Greek-style financial crisis that would shake the world's banking system. An excellent first step is London's levy on bank profits.

Contrast this to France's endless arguments. And worse, to the United States, where neither the Obama administration nor the US Congress has been able to summon the political courage to begin cutting America's titanic, $1.4 trillion annual deficit inherited in large part from the Bush Administration.

As the US edges ever closer to the kind of financial ruin that undid the British Empire after World War II, the administration has actually increased military spending at a time of 9.5% unemployment.

Washington is now planning second "quantitative easing" -- which means, in plain English, printing billions more dollars backed by nothing but hot air and hope.

By running its dollar printing presses overtime, the Obama White House is sure to further drag down the value of the already battered US dollar, inflicting growing stress on the world's wobbly financial system.

The United States would do well to pay close attention to Britain's very real revolution. Washington needs a George Osborne.


copyright Eric S. Margolis 2010


 

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