The writer, Jean-Pierre Landau, is a former deputy governor of the Bank of France and is a professor at Sciences Po.*
From Project Syndicate, September 9:
French Prime Minister François Bayrou’s government collapsed following a parliamentary confidence vote, and it has only itself to blame. In fact, there is good reason to think that citizens are overwhelmingly rejecting the government's budget precisely because they have effectively been told that they cannot.France’s fiscal position is deeply unbalanced. Last year, the country’s total deficit reached €169.6 billion ($200 billion), or 5.8% of GDP. With public debt at 113% of GDP, the need for adjustment truly is real.
On the other hand, France is also the only major OECD country to have enacted a deep structural reform – specifically, far-reaching changes to its pension system – since the outbreak of the COVID-19 pandemic. And while France emerged from the last decade in a weaker fiscal position, the recent ballooning of its national debt fits within a broad global trend, which has also enveloped the United States and Germany as well.
And yet, two successive governments have chosen to portray France’s fiscal position largely in near-catastrophic terms. Finance Minister Éric Lombard recently went so far as to suggest that France might require an International Monetary Fund bailout, though he later retracted his statement.
This goal was to convince voters to support the government’s proposed budget, which would significantly reduce public spending in 2026. It would suspend the indexation of most public expenditures (including pensions) to inflation and eliminate two public holidays. It was a good fiscal-consolidation package, neither especially regressive nor progressive, but it has proved highly controversial.
But overdramatizing the situation was a tactical mistake. It rarely works in democratic societies. On the contrary, it tends to breed mistrust, fatigue, and defiance. Citizens want to show they have choices. They stage protests, vote against incumbents, or disengage from politics.
We have seen this dynamic at work when it comes to climate policy. Instead of presenting the merits and benefits of fighting global warming, governments and international organizations often stress dire warnings of impending catastrophe. But forcing interventions onto citizens, especially those viewed as costly or unfair, based on a Hobson’s choice – “It is this or climate doom” – has often triggered backlashes, including in France, where the “yellow vest” protest movement emerged in 2018 in response to fuel-tax hikes....
....MUCH MORE
I see that M. Landau is a student of the "Softly, softly, catchee monkey" school of central banking.
*And speaking of schools, our last reference to Sciences Po was in August 15's "Climateer Line Of The Day: Truth-Telling In Academia (follow-up to Capitalism And The Market Economy Are Completely Opposite Intellectual Paradigms)".
Also in the body of August 2021's "Is French Cuisine a Gateway Food to White Dominance?" which begins with this intro:
I had a Russian driver last week (back to regular blogging on Monday) who insisted on practicing his English on me even though I had warned him that what he took away from our conversations might get him in trouble with linguists and language purists. So we stuck to simple subjects.
Until he started talking about his tips and tricks for cooking eggs. After two minutes I had to ask him if he had attended Bocuse or maybe the Swiss school. He said, sadly no. Seriously, when he got into his oeufs en Meurette I could smell the bacon and mushrooms. Finally I said flat out, "You're a chef" and he said "no, a chemist, don't cook your eggs on high heat, the proteins tighten too much"
Huh....
Must be something about August.
PARIS – France’s government has now fallen after losing a parliamentary confidence vote brought by Prime Minister François Bayrou in a failed attempt to force the National Assembly to reckon with the country’s fiscal troubles. By ousting Bayrou’s team, the opposition – comprising both the left and the right – appeared to deny the need for fiscal adjustment.