Friday, April 15, 2005

French Focus with a bit of German thrown in.

I was interested to note in article at FT.COM entitled Chirac will not resign if vote lost that:

Nicolas Sarkozy, the populist president of the ruling UMP party, on Thursday contradicted the president's upbeat views by saying that the “French social model” was failing the people.

In a speech in southern France, Mr Sarkozy said that with a 10 per cent unemployment rate France should stop saying its system worked better than that of others. “In 20 years both the left and the right have doubled the credits to combat unemployment but we have not produced one fewer unemployed person,” he said.
Let's hope Sarkozy wins the Presidency because otherwise France will just continue to follow Germany down the road to economic basket case status.

The situation in Germany shows little signs of improvement. Over at Morgan Stanley's Global Economic Forum they are commenting on minimum wage legislation and how it will contribute to the ongoing hollowing out of the German economy.
The purpose of the minimum-wage manoeuvre is to appease trade unions and left-wingers ahead of the important state elections in North Rhine-Westphalia on May 22. North Rhine-Westphalia is not only the most populous German state, home to 35% of the population. It is also the Social Democrat’s longstanding home-base. If the present Red-Green coalition government were ousted, which is what polls showing the Red-Green votes at a combined 44% and thus behind the CDU 46% suggest, this would be a serious setback for the Schroeder government. As in the transition agreement on migration and the rejection of EU Services Directive, the government’s desire to fend off the competitive pressures from the new Member States will likely accelerate the hollowing-out the German economy. In today’s globalised markets, the competition is just too powerful. Erecting new hurdles just as the labour market reforms start to bite and the incentives to work increase, seems a high price to pay for a pre-election gimmick.
The prospects for the Eurozone are looking more than a little dismal these days and getting worse as each new one passes!

Finally in another article at over at the FT on the EU Referendum a respected French political analyst, Dominique Moïsi, puts his finger on the nature of the problem France is facing. "
The young, who are pro-European, are not mobilising because the cause of Europe is being represented by people they don't like," said Mr Moïsi. "It is a leadership problem from Barroso to Chirac."
Chiracs’s record on Europe hampers Yes campaign
This is true right across Europe; political leaders are neither respected or believed – Blair, Schroeder, Berlusconi are a few names that spring to mind.