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The european economist
An interview on Regional economie issues
This week with Marc Blondel – French union leader
Shift from mixed economy is behind french malaise
French union leader Marc Blondel rejects the widely held view that France’s 12,6 % unemployment rate can be blamed on ils restrictive inbor market. Instend, he argues that the problem lies in France’s sluggish economy, which is being crimped bu the governments attempt to cut the budget deficit in preparation for the planned European single currency.
Mr. Blondel, who was responsible for economic issues at the nonpartisan Force ouvrière union before taking over as secretary general, doesn’t openly condemn monetary union. But he told The Wall Street Journal Europe’s Paris correspondent Charles Fleming that french resistance to free-market reforms means the country will likely see further p^rojets.
The Wall Street Journal Europe : Why does France suffer from such stubbornly high unemployment ?
Marc Blondel : Because of the lack of economic activity. The real question in France is whether we are going to persist in this restrictive economic policy. However, unemployment in France is also clearly a structural problem, and all the different strategies of alleviating the problem – such as government allocations, subsidies, business support measures – have simply pushed off the final crunch. We need structural reforms, which include supporting purchasing power, reforming the labor market and opening the french economy.
The Wall Street Journal Europe : French employers complain that the labor market is too restrictive.
Marc Blondel : They also say they don’t hire because of the slack economy. I don’t see any major obstacle to hiring or firing people in the french Iabor code. I am sure that if firms had work to do, they would hire regardless of any administrative obstacles. Seen by an American company, we might seem a bureaucracy bound system. That’s true, but it’s a product of our history and you can’t just make it disappear like that.
The Wall Street Journal Europe : What could you learn from other countries’ success in creating jobs ?
Marc Blondel : France has created jobs too. Maybe not as many as others, but we have created jobs. You have to define what you mean by jobs. For a french salaried worker, a job means a permanent position with a·contract and not a precarious post. There’s a whole category of occupations that aren’t really considered full-time jobs and which aren’t integrated into the statistics. Being classified as "unemployed" in France cloesn’t necessarily mean that you haven’t got any work.
The Wall Street Journal Europe : Are you suggesting France’s unemployment problem isn’t as serious as it appears ?
Marc Blondel : Of course, there’s a problem of unemployment in France. And it’s worse here because the whole population is gripped by a sort or despair. It is no longer an economic problem but has become a psychological and social problem. That explains a lot of behavioral patterns, including the lack of confidence which we find not only among the bosses but also among salariecl workers, all of which slows down the economy. People are afraid of tomorrow.
The Wall Street Journal Europe : How do you explain the current french malaise ?
Marc Blondel : It’s the move towards a free-market economy. I have the impression that the french haven’t understood what a freemarket society means. What we had until now was a mixed economy, with the nationalized public sector operating alongside the private sector. No matter whether the government was right – or left-wing, there was Iittle shift in the relative weight of the two sectors. But now, under the pressure of the European union, which has taken the UK as its mode, and under the pressure of globalization, the free-market sector is gaining the upper hand.
The Wall Street Journal Europe : So far you haven’t spoken out against European monetary union ?
Marc Blondel : I haven’t, but that doesn’t mean I won’t. So far, my organization has never taken a position.
The Wall Street Journal Europe : Twice in the last year striking workers have brought France to a standstill. Will we see more ?
Marc Blondel : There will be more clashes. The pace of change is such that there is a lot of friction, but even if there have been two rounds of strikes this year, the system hasn’t completely seized up. But we’II see. President (Jacques) Chirac has accelerated the movement towards monetary union, but l’m not sure it will be accepted so easily by the French.