Vive La France! – but for how long?


Mobi-Babble

I was relieved to have finally finished Part Three of my novel the other day and am now quite excited about getting stuck into the final, Part Four. I know these are ‘famous last words’, but I do expect Part Four to be considerably shorter than Part Three, and plan to have  the whole novel completed before the end of 2012.

The reason I can’t be absolutely sure is because although I have the plot lines sketched out in advance and I know in general terms where the story is heading, a majority of the detail is ‘created’ as I write, and it is quite difficult to estimate how many words it will actually take.

So far I have written 174,000 words, so it wold be reasonable to expect that the completed novel will probably be between 200- 250,000 words, but who knows for sure? I often add to, or change the minutiae of the story as I write. Sometimes I get inspiration during my afternoon walks!

Noo and her son are getting very excited about our pending  5 day/4 night trip to Nong Khai on Wednesday, and Noo has been busy buying  all manner of goodies from the stores and local markets to give to her daughter and other family members. Our original plan was to take the tandem bicycle with us in the back of the pickup but the other day she told me that she doubted we would be able to take it after all, as the back will be chock-a-block with stuff! Additionally there is an aunt and her daughter arriving in Pattaya from Chanthaburi next Tuesday to hitch a ride back to Nong Khai so it will be a full load.

This will be my first venture out of Pattaya since my operation four months ago, and although I’m still not 100% recovered, I think I am fit enough to make the long journey. Noo has blossomed into a very competent driver and she will share the driving with me, so we should easily make it up there in one day, a distance of around 450 miles, provided we leave early enough.

So I am not sure how much, if any, blog or novel writing I will accomplish during the next seven days, but for sure I will be doing something, just to keep in touch.

 

 

Vive La France – but for how long?

Some years ago, when I was the Deputy General Manager of a large international Insurance conglomerate based in London, I had the dubious pleasure of taking on the responsibility for opening a new branch office in Paris.

We opted for a suite of highly ornate rooms in a renovated, ancient building which was located in the heart of Paris inside the prestigious Place Vendome. The building had a plaque on the wall to indicate that the composer Chopin had once lived there and on the opposite side of the square was the famous Ritz Hotel. Posh eh?

We selected this location at the behest of our newly engaged French management team, who urged us to go  ‘first class’, as in their  opinion, this was the only way to make a ‘splash’ and announce our arrival in the local insurance market.

Although I had made several previous trips to Paris and other French provinces, including attending an international insurance conference in Paris  a couple of years earlier, this was my first experience in trying to do business in the country.

It was 1998 and we had decided to expand our operations into France after the recently enacted EU laws had  removed all national boundaries as far as insurance business was concerned, and effectively made the whole of the EU, a single insurance trading area.

If an insurance company was licenced to transact business in its ‘home’ territory, then that same licence would also permit them trade anywhere within the EU, without the need to obtain additional licences.

That was the theory, and that is why we rushed into France to sell our insurance products. In practice , it wasn’t quite so straight forward, as even though the new laws permitted us to set up a branch and trade in France, the nasty French civil servants had created  massive layers of bureaucracy through which we were obliged to wade, before we would receive the all clear to open our doors to business.

I recall to this day the endless form filling, the countless visits to government departments, public auditors and lawyers which went on for months before we were able to commence trading.  I also well recall my astonishment at the leisurely hours that all government employees seemed to work, which included several hours for lunch every day. The private business sector wasn’t much better, and my staff and I were continually frustrated in our efforts to speed up the process.

The French being French, they were making it as hard as they possible could for bunch of rossbifs to do business in their beloved country, without once thinking about how much money we would bring into the country and how many French staff we would employ, as for sure as hell we wouldn’t be hiring too many non-French staff due to the language problems.

But fighting the French bureaucracy was only the start of our problems. The French employment laws, and related matters such as health benefits and compulsory pension contributions made our operation the most expensive, per staff-member, of anywhere in the developed world, and at that time we had operations in such far flung ‘westernised’ countries as the USA, Canada, Australia and other European territories.

All this made it very hard for us to turn a profit, and if the cost of labour wasn’t bad enough already, we soon discovered that we could not even ask our employees to work overtime – even if we paid them – as it was against the law. Can you believe that it is common practise for French police to visit offices in the evenings, to try and catch employees doing ‘illegal overtime’? If successful, the employer would be subject to arrest and even imprisonment?

But that wasn’t all. Employees are entitled to so many holidays and time off for all manner of reasons that it effectively means you are lucky if they spent half of the working year actually in the office.

Further, anyone who has tried to business in Paris during the months of July and August will be aware that nearly every government department is pretty much closed for the duration. Even private companies – if they open at all during these months – operate with skeleton staff and very little business is done until September, when the summer holidays finally are over.

Why am I writing about all this? The reason is that during this period of my French business adventure, (or should I say nightmare), I became quite knowledgeable on French laws and customs and the ways they did their business – and indeed, the manner in which the country was run. The more I learned about it, the more I was in awe of it.

The reason for this? Well, as far as I could determine, their economy was in pretty good shape, and on the whole, the French people seemed to be better off than their English counterparts; but more than this, they seemed to enjoy a much better quality of living, with their endless holidays, expansive social services and their superior, ‘money- no- object’ healthcare service.

It really seemed to be a truism that the Brits ‘live to work’ and the French ‘work to live.’ How was this possible?  Surely their economy could not survive such a lackadaisical and indifferent attitude by their countrymen, to say nothing of the cost to the country of their extensive social services and having to support a populace who spent half their time on holiday.

What was their secret? I used to wonder. Surely it can’t last forever? Surely there will come a day of reckoning?

But the country seemed to continue to go from strength to strength and even when the world recession hit, France appeared to be no worse off than many of its neighbours – including the UK – and certainly much better off than some of their fellow Europeans in Southern Europe.

Did we see the first cracks in their economic façade when Standard and Poors’ took the dastardly step of downgrading their credit rating? My God, how enraged was Sarkozy and his henchmen about that! And how hard they tried to somehow deflect the blame for the downgrade on le bastardes, across the Channel; screaming their childish nonsense about the Brits being the ones who should be downgraded, not the mighty Frogs.

Actually the downgrading did not mean that much, as it was mainly as a result of the French banks’ huge exposure to Greek debts, and not necessarily a reflection of an overall worsening of the French economy.

But now The French have chosen a new socialist President, Francois Hollande, maybe the economic cracks have started to widen and maybe at long last, their economic chickens are coming home to roost.  

Monsieur le President Hollande has made it clear that he is someone who determined to not only maintain the French socialist state, but even strengthen it, at a time when the country is already struggling to reverse what we now know to be thirty years of slow economic decline.

France’s share of EU exports over the last decade has dropped from 17% to 13%, and its trade balance has changed from a surplus of 2.5% of GDP to a deficit of 2.4% since 1999. The cost of the state bureaucratic machine is now a whopping 55% of GDP and its spiralling debt is more than 90% of GDP.

Only 39.7% of French citizens aged 55 to 64 are in work, compared with 56.7% in the UK and 57.7% in Germany. Early retirement incentives are to blame and French workers spend the longest time in retirement amongst advanced countries.

Over the past decade, France has lost 20% of its unit labour cost competitiveness against Germany as it has enforced statutory wage increases and higher employer benefits.

The French industry has been losing 60,000 jobs a year for a decade and manufacturing has shrunk to 12% of GDP – admittedly as bad as Britain, but without Britain’s booming financial and other service sectors to help bridge the gap.

Hollande  believes that drastic spending cuts are the only way to cap France’s debt at 90% of GDP and keep the rising debt under control; yet it has already been demonstrated in Greece, Ireland, Portugal, and Spain that fiscal reduction therapy has little effect on the deficit in the absence of any corresponding  monetary stimulus. Ultimately, the GDP and the tax base will shrink, making the debt/GDP ratios even worse.

Yet Hollande has no plans to stimulate the economy, and his only action has been to produce a budget which will tighten discretionary fiscal policy by 2% of GDP next year, right into the teeth of a deepening French depression.

Renault chief Carlos Ghosn warned last week that France’s biggest car company would “cease to exist” in its current form unless there was a radical change in the country’s work climate. “Not over three or six months perhaps, but over three years, or five years, yes, the danger is real,” he said.

Jean Peyrelevade, ex-head of Credit Lyonnais recently stated: ‘The whole economic structure of France is an anachronism in a Chinese world and a German currency union. We are consuming the leftovers of a past prosperity.’

Sovereign debt strategist Nicholas Spiro says growing doubts about the “credibility of French fiscal and economic policy” may soon bring Mr Hollande’s strange honeymoon to a close. It is a widely-shared view. Danske Bank’s bond team sees a ‘significant risk that the market will turn on France in 2013’.

Goldman Sachs believes that said that the demands made by the European Stability Mechanism (EMS) to bail out Spain and then Italy are too large for the “vulnerable core” of France, Belgium, and Austria.  As a result, these countries’ own fiscal health will come under the microscope.

So maybe, all those years ago, when I was pondering this French economic paradox – the ‘writing was already on the wall’ after all. It is just taking a long time to work its way through.

A bit like the sub-prime mortgage crisis…

 

Gor blimey, mate, it’s the Effing Union!

We have all heard in recent years about how money has been scandalously wasted within the EU. We have read how countries like Greece and Spain, and to a lesser extent Ireland, have all been net receivers of European largesse over many years, and have squandered most of it in a shameless, wasteful and often in a corrupt manner.

Alongside this, we are told that these countries lied about their economic credentials when they applied to join the EU and have blatantly ignored or flouted many EU regulations ever since.

Even countries like France have been known to deliberately disobey EU rules when it suited them. Remember the British beef scandal?

The UK has always been a very law abiding country and nowhere has that been more evident than in its efforts to obey every single EU rule, no matter how petty, or how much it may be destroying someone’s livelihood – from selling the correct shape of bananas to weighing produce in grams rather than ounces – the list is endless.

Yet here we have a case when the UK genuinely believes that they have not broken any rules by setting a VAT rate of 5% for the supply and installation of materials such as draught insulation and solar panels, and the EU’s mandarins are threatening us with ‘hell and damnation’ if we don’t change our ways.

The UK Government introduced a reduced VAT rate on energy-saving materials as part of its drive to reduce carbon emissions, a subject that is of major concern to the EU bureaucrats, but in spite of these worthy motives, the EU refuses to budge, stating that while they allow reduced VAT rates to be levied on a range of goods and services, including food, water and some drugs, they do not allow VAT reductions on energy-saving materials.

The UK energy saving initiative is a decidedly ‘green’ measure which should be more than welcome in a community where they have caused worldwide anger by introducing a levy a tax on passenger jets who do not meet their emission standards.

Instead of this, they have issued a stark warning to the UK government, saying that the UK has two months to amend the law or face legal action in the European Court of Justice (ECJ). The ECJ has the power to fine EU member states that do not comply with EU law.

The Government has claimed that the scheme will lead to £14 billion worth of private sector investment over the next decade, supporting 60,000 jobs in the insulation sector alone.

Since joining the EU, the UK has been a net contributor to the tune of billions upon billions of pounds, while the likes of Greece, Spain and Ireland have been net receivers. Yet these countries have broken the rules at will, with no noticeable repercussions, except to be bailed out when they are going bankrupt due to their own profligacy.

I don’t know about you guys, but it seems to me that something is not quite right in the State of Denmark….

 

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