France/EU - State desintegration
THE ECONOMIC AND SOCIAL CONSEQUENCES OF THE VOLUNTARY DISINTEGRATION OF STATE
AND POLITICAL CLASS IN FRANCE
Didier Bertin - October 31, 2015
I- DECEPTION OF MOST OF CITIZENS WHO REFER TO A STATE THAT NO LONGER EXISTS
The power of the State used to be the supreme power of the French nation as having the means to intervene politically and economically to safeguard the interests of the citizens. The growing application of the liberal model has led to the dismemberment of the State power that can only have vain incentives policies in using the public funds. Within the Nation, the State has now a secondary power lower than that of the private companies that have imposed the return on capital as the supreme rule beyond any moral, social or national interest.
This policy of vain incentives called at the highest level "toolbox" had no results since 2012 and did not change anything to the policy led before that date but was in line with the doctrine of the governments then in place. In fact citizens do not clearly anymore differentiate the liberal right wing and the left wing which moved from socialism to rightist liberalism. The governments formed after 2012 were not able to change the economic and financial policy of the right exempting themselves of their pre-election commitments and empting consequently the value of the vote and then of democracy.
II- THE NECESSARY ECONOMIC STEPS CANNOT BE TAKEN ANY LONGER BY A STRENGTHLESS STATE
Until recently the state was not only attempting a policy of incentive but was a key player in the national economy whose decisions had to be taken into consideration by the private sector. It seems that through their demands, the citizens have kept referring to such a state that had been there a few years ago representing the supreme power of a centralized nation.
Before World War II the State (representing all the citizens) owned the telephone networks, railways networks and factories related to defense. The possession of these strategic assets was the natural vocation of the State. After the war, General De Gaulle increased the public power by nationalizing the coal mines, Renault, air transport, the central Bank of France, Gas and electricity companies as well as the eleven largest Insurance companies. In 1948 the four largest French banks were nationalized. It seemed natural not to leave in the hands of private interests entities controlling the existential functioning of the nation. This logic of protection of the nation's strategic assets has further extended in 1983 by François Mitterrand who nationalized major industrial companies and seven other banks.
At that time the state directly controlled one third of jobs in France and therefore had the means to influence the national economy. The state showed its supremacy and was not only a spectator in the nation.
The State power could have been greater if the State owned companies would have been properly managed but this was depending on political choices and in all cases the real tools were potentially available.
As a matter of fact the Achilles heel of this giant was indeed its disastrous management which should have involved the change of their managers and first the change of the nature of the political class that offers them their positions but certainly not the abandonment of the state-owned assets. This mismanagement did not prevent however the most remarkable economic growth in France i.e. that known as that of the thirty glorious years (1945-1975).
State power remained intact until 1986 with the arrival of the Right wing in power, but the hardest blows were struck from 1993 to 2007 by both the Right and the Left wings. The State sector has been gradually privatized for a negligible amount as compared to its possible influence on the economy and to the size of the public debt
APPROXIMATE VALUE OF STATE ASSETS SOLD
1986-1988 (right wing): € 15.4 billion
1993-2007: € 76 billion
Right wing: 57.7% = 43.7 billion-Period 1993-2007
1993-1995: € 17.5 billion - 1995 to 1997: € 6.2 billion
2002-2005: € 13 billion - 2005-2007: € 7 billion
Left wing: 1997-2002 = € 32.3 billion = 42.3% - period 1993-2007
In terms of public debt (€ 1,212 billion in 2007 and € 2,089 billion to the first quarter 2015 = 97.5% of GDP) these amounts are quite negligible.
However the size of their added values deprives the state of an important part of its participation in the GDP and employment policy.
The State sector generated a third of jobs in France. The state participation in employment decreased from 33.3% in 1983 to 18.5% in 2013. If the State had maintained its share in employment it would have ensured today about 4 million additional jobs subject to the improvement of its management regarding the creation of added value.
The governments must target full employment but since 2012 no tangible progress has been made to reduce unemployment despite promises. The unemployment reflects a drama and yet authorities and agencies play more with the figures than with reality. According to sources in France the number of unemployed in 2015 would range from 2.852 million in 2015 ((INSEE) to over five million including all categories of unemployed people from A to E, DOM, non-registered unemployed people, over-aged applicants authorized not to look for a job and the occasional poor workers.
The decision to stop the national service for all was based on a defense utilizing only nuclear dissuasion power and sophisticated weapons but in fact the French troops are obliged to continue to be involved in very conventional conflicts in many places on the planet. Furthermore national service was a professional training opportunity for many unqualified people opening opportunities of jobs and it would have been more adapted for the safety of the national territory against terrorism and resuming control of territories where the laws of the Republic are no more applied as they should be.
III - EUROPEAN UNION AND IDEOLOGY OF THE STATE WEAKENING
The idea of the Union of European peoples and the end of any conflict between them was brilliant; the idea of the obligation to follow ethical rules and increase human rights beyond the strict necessary was also brilliant.
The history of the Unification of Europe began 65 years ago, but the real decline in the power of states in favor of a free market for large companies really began with the Single European Act in 1986 followed by the Maastricht Treaty of 1992. The agreements on European Union should have taken into account the specificities of each state and particularly those of France and its State sector. With the Euro which is actually the new name of the Deutschemark with the particular monetary policy of Germany, the loss of state substance has substantially increased.
Yet France had a particularly important role in the formation of Europe beyond that of simply follow the model of Germany. These two countries have completely different natures: France is an old and centralized nation whereas Germany is a recent nation born on the basis of a cluster of small states united by the victory of Prussia against the German Confederation in 1866 (Sadowa). Prussia was allied to 14 German duchies, principalities and cities and the German Confederation led by Austria had 12 allied German Kingdoms, principalities, duchies and cities. The territorial partition was so big that there were free cities and Frankfurt joined the side of Austria while Hamburg had chosen Prussia.
One could have imagined in Europe a more flexible common currency and economic policy but the dominance of liberalism in Europe and the vertiginous increase in the number of member states have imposed a strict application of liberalism. The inclusion of former communist countries which were supporters of liberalism in order to achieve the dream of consumerism built on the propaganda effective during the Cold War has worsened the situation. More than 20 years after the end of the communist era the freedom and well-being do not depend on any doctrine but only of the purchasing power. The key to freedom and well- being i.e. the purchasing power is sorely lacking for a vast majority of the peoples of these countries and this situation is aggravated by the substantial reduction in social services. In 2011, the average poverty threshold for the EU15 of 1995 was around 835 Euros while the average threshold for Poland, Bulgaria, Hungary and Romania was about 316 Euros. According to the Western countries poverty threshold almost all the populations of these countries are living below the poverty line. The calculation of a poverty threshold by country is shocking if even the median revenue (utilized to calculate the poverty threshold) is not sufficient to live decently.
In terms of human rights the Charter of Fundamental Rights of the European Union is wishful thinking since one can be exempted (i.e. Poland and the UK) and is really binding if the national authorities accept to enforce it. The European Commission has no power in this field and its power is limited to the economy and finance. The European Union even includes a dictatorship (Hungary).
The weight of Germany and moral weakness of the European Union have just been illustrated by the adoption of an authorization to greater pollution from diesel engines probably linked to the desire to adapt to the dishonesty of the Volkswagen group.
IV-EUROPEAN UNION AND FREEDOM -DEMOCRACY
The great diversity of EU Member States regarding many areas such as human rights, languages, economic structures, State sector, and their history do not make the European Union one nation but a group of different nations with specificities which cannot always be unified.
The role of the State is also a feature of each Member State, which should have been respected. However the Charter of Fundamental Rights should be imposed "in fact" to all under penalty of exclusion from the Union.
The European Union imposes on everyone a strictly liberal rightist policy; the action of the governments that wish to follow a different path is neutralized especially when they have no desire to be heard which questions the value of the national elections. The consequences of this undemocratic behavior are a majority abstention in European elections, increasing abstention in the national elections and discrediting of the political class. In addition to the rise of abstentions, it encourages the development of anti-European parties and extremist parties.
The American economic model that the EU imposes cannot be applied so easily to other countries for multiple reasons. USA is a great economic power and in case of major economic risk, the US government and the federal Bank intervene heavily to rescue major industries and Banks forgetting for a while the liberalism. Pragmatism overrides doctrine when necessary.
There are no so shocking disparities between the States as in European Union. The United States is one nation united by their common language and culture mainly Anglo-Saxon including large African-American and Latin American influences.
There is no common international policy in Europe but the main member states follow that of NATO, i.e. that of the USA whose initiatives led to the destabilization of the Middle East which involves now a substantial flow of refugees to Europe and the return to Cold War against Russia. The Western countries must understand that minority rights must be respected even for the people of Russian origin. Latvia a member state of Europe prints on the Latvian ID of citizens of Russian origin born in Latvia the outrageous discriminatory mention:”Non citizen” A similar situation exists in Estonia. Again the Charter of Fundamental Rights is violated and the European Commission does not intervene.
V-CONCLUSION: CAN WE SAVE THE EU?
We should restart from the initial idea of a United Europe but respecting the diversity of Member States including their national economic structures. The free competition is not related to the property of companies and to their willingness that capital return has priory on employment. Only selling under the cost could distort free competition and within that limit employment may be prioritized. A State-owned sector could apply that priority to employment much more easily than a private company especially since the unemployment insurance deficit in France in 2015 should reach 25 billion Euros. Under these conditions and at the macroeconomic level, gains in France based on the sole criteria of Capital return might substantially be a mirage or transfer of money from the State sector to the Private sector. But we often forget that free competition is distorted by the exploitation of poverty and related low salaries in some Member States. The economic logic should not be reduced to a mathematical equation but should include an ethical view in Europe.
France needs as it used to have, a strong State sector which would allow it to be a true actor of the economy and not only a spectator and that in order to respect its commitments towards the citizens.
The economic challenges have become complicated and require proven skills and a non-conformist innovative spirit for companies ‘leaders and for the political class unable now to propose a different option to the European Union.
The absence of real political choice raises the issue of the role of political parties. Their role has been essential in the twentieth century but the deal appears to have changed in the twenty-first century. Political parties follow mostly a similar policy as they mostly follow a similar path. The parties proposing another way are the extremist parties which have no competence and ethics necessary to achieve it.
Recently a major political party has utilized its members to elect their leaders and finally applied a policy that its members had not chosen. The members provided money and free work to permit the elections of candidates with only a huge ego and a thirst of power. The party gave its members the impression that they play a role in allowing them to express themselves in meetings where their views are not taken into account and even not noted; Democracy seemed to play when the members are requested to support different motions but these are quickly forgotten once the elections are over.
These parties begin to look like sects where the Gurus request from their adepts’ money and free work for the benefit of their own ambitions. Fortunately members can become aware of the situation and go, which is more difficult in the sects.
Other modes of expression should be developed to replace the parties through associations and social networking combined with a system of referendums frequently organized on all the key issues of political life. The views of various philosophers should have more impact than those of politics to learn to think right and far.
In order to fight against unrealistic electoral programs they should take the form of a contract between citizens and elected representatives, which could be reviewed annually as in most organizations. If it turns out that a program proposed before the elections is in fact not applicable, the people elected on such basis should abandon their function as in most organizations. This idea is not intended to cause instability but force the election candidates to stand on solid bases.
The European Union and the euro remain viable subject to rigorous ethical and more flexibility in their operation, particularly as regards the right of member States to maintain the most convenient State sector.