French want British miracle as a model for change

[Blackleaf]

Britain's economy is continuing to outperform thise of Continental Europe. Britons themselves are getting wealthier because earning has outstripped inflation growth, whereas there counterparts in France are not, as their earnings are only just managing to keep up with inflation.

Things are also looking bad in the areas where France supposedly outstrips Britain. French productivity (output per worker) is still higher in France than it is in Britain - but only because French firms tend to employ machines rather than people, whereas the opposite in true in Britain. This is also contributing to the high rate of unemployment in France which is DOUBLE that in Britain -

French want British 'miracle' as a model for change Ashley Seager Wednesday May 25, 2005

The Guardian

France's poor economic performance, outlined in yesterday's OECD report, is one of the major issues dominating the run-up to Sunday's referendum on the European constitution. Unemployment is 10.2%, more than double Britain's 4.7%. Almost a quarter of young French people, including graduates, are out of work. Britain has a (Western world) record 75% of its adult population in jobs; France has 62%.

"That is a tremendous waste of human capital. The French model is under threat because not enough jobs are being created. Britain is exploiting its full potential but France is not," says Raymond Torres, a labour market specialist at the OECD.

He is not the only one to come to this conclusion. The daily newspaper Figaro recently said: "The British 'miracle' should be a model for us."

France's high unemployment is not a result of economic stagnation - since 1998, the French economy has expanded by 13%, not much less than Britain's 17%. But France has grown more slowly than Britain in the past two or three years and the OECD forecasts its growth will remain weak for the next couple of years.

Nor is it a result of other economic problems. Productivity, or output per worker, is higher in France than in Britain, as French firms have tended to employ machines rather than people. France's generous unemployment benefits, and the high costs that firms face if they hire anyone, have reduced the incentives both for the unemployed to work and for firms to hire people.

Rod Mitchell, a Briton who has lived in France for 20 years and set up a mortgage broking business five years ago, says France is in decline.

"There's not a work culture any more. People have become too dependent on the state. There would be a leisure culture but people don't even have the money to enjoy their leisure. This country used to be wealthy but will soon be bankrupt."

Figures prove his point. Average earnings in France over the past decade have only just kept up with inflation, meaning the French have not got any wealthier. In Britain, earnings growth has comfortably outstripped inflation. Britain is getting richer but France is not; Britain is affording more spending on public services while France is cutting back. The British are buying homes in France.

"France is starting to look like Britain in the 1970s. The two countries are moving in opposite directions. The French are petrified of the changes they need to make and are burying their heads in the sand," says Mr Mitchell.

"The English success, built over 25 years, rests largely on the flexibility of the labour market - flexibility which is not incompatible, quite to the contrary, with high levels of social protection," says Arnaud Vaissié, the London-based chief executive of International SOS, who has formed a thinktank of French company bosses living in Britain.

Flexibility, however, remains a dirty word in France, where labour market rigidities - high social insurance costs, the 35-hour week, the difficulty of making people redundant - abound. And the cost to France of its generous welfare system is enormous.

The fundamental change France needs, say Mr Torres and Professor Richard Layard of the London School of Economics, is to reform its unemployment system radically so that it encourages people back into the job market with a carrot-and-stick approach.

"The longer you pay people for doing nothing, the longer they will do just that," says Prof Layard.

theguardian.co.uk

[Commander CMG]

If the French spent as much time working rather than striking their economy might be a little stronger?

[warden]

Blair will have 6 months as eu leader comming up,lets sit back and see what rabbit he pulls from the hat.