TCS Daily

De Villepin's War

By Sylvain Charat - September 7, 2005 12:00 AM

"Since my nomination, I have been in a merciless fight against unemployment, which is THE evil of our country. But this evil is not irreparable if jobs we look for jobs where they can be found. That is why, whether you are a company head or looking for a job, I offer you tools for finding work that are adapted to the needs of each of you, so that together we can move toward a more just and brotherly society that offers opportunity to every one."

Those are the words of French Prime Minister Dominique de Villepin, who on September 1 launched a "war" against unemployment. His quote comes from the home page of a new government web-site that is on the front line of this socially raging war (and now we all know well he can declare war...)

It must be said that, a hundred days ago, French President Jacques Chirac and Villepin discovered something all French people already knew: unemployment is a problem and has to be fixed. Then, in a surreal announcement, Villepin declared this issue was an emergency.

So they came up with surreal ideas to address it. There are no jobs, so the state will provide them. You do not have the money to hire, the state will subsidize. You don't know how to proceed, the state will accompany you. This is how you wind up with what may be the most modern presentation ever of a completely archaic ideology: a web site promoting state intervention and called "Battle for Employment" ("Bataille pour l'emploi").

Make no mistake. In Chirac and Villepin's view, unemployment is the government's battle. No one else's. Before they intervened, there was nothing that could be done efficiently, of course. They do not believe in the market, they are deeply anti-free trade, deeply rooted into collectivism, so they have to fix the problem themselves. So much that a sentence on this web-site, written with Villepin's handwriting, declares: "In this battle, I count on you." It is not the state that creates a favorable and friendly context for companies to hire, it is companies that create a favorable context to help the state reduce joblessness. Villepin is not looking for economic growth but for what he calls "social growth" -- in other words, an ever-growing state. Things are upside down in France.

On the home page of this website, there are two big squares: the green one is for job seekers, the purple one for company heads. They will be told by the government everything they need to know to find jobs or hire people. Should we assume then that jobless people and entrepreneurs are so stupid that they do not know how to function?

At least the seven kinds of contracts the state has created are listed on one page: New Hiring Contract, Professionalization Contract, Young People in Companies Contract, Employment Initiative Contract, Contract for Future, Insertion Contract, Apprenticeship Contract. Don't forget of course the jobs offered in the administration, the classic and usually most popular kind.

Other measures include: an employment bonus given to 8.8 million people that will now be paid monthly and transformed into an additional payment for low wages: it will cost €1 billion in the two coming years. Then there is a bonus for employment resumption that amounts to €1,000 which will now be given to all beneficiaries of government assistance, along with a yearly payment of €150 to incite them to work. This involves about 6 million people.

Yet all this is useless for reducing unemployment. It is not the lack of action but the very structure of the French economy that is responsible for the high rate of joblessness. Indeed, what Chirac and Villepin seem to forget is that if the unemployment rate is now around 10 percent and has not gone below 8 percent in the last 20 years, it is because structural unemployment, i.e. the lowest rate possible when the economy is strong, is estimated in France at 9 percent by the OECD. This is enough to show that a statist economy does not work.

So it's all much ado about nothing. Old collectivist solutions for old problems resulting in the same failure: France gets stuck once again. But the one new thing is that at least Villepin now has his own little war.

Sylvain Charat is director of policy studies in the French think tank Eurolib Network


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