May 7, 2008 | Commentary on Democracy and Human Rights
When French voters swept Nicolas Sarkozy into the Elysee Palace
in May 2007, he was hailed as a brave reformer, a radical free
marketeer who would challenge decades of socialist economic
consensus. Some even dubbed him a modern-day French Reagan, or a
Gallic heir to Margaret Thatcher, a conservative revolutionary who
would light a political bonfire in Paris, shaking up France's
dirigiste planned economy with lower taxes, reduced state
spending and less red tape.
One year on, however, France looks pretty much the same -- backward, miserable, and stuck in the 1970s, with business confidence plummeting. Unemployment has fallen slightly but stands at just under 8 percent, the fourth highest in the European Union. Economic growth is sluggish and struggling to reach 1.5 percent, according to the IMF, with government spending still accounting for more than half of the country's GDP. Inflation is at its highest rate in 16 years, and public debt continues to rise. As the Economist Intelligence Unit (EIU)points out, total expenditure by the French state has actually risen under Sarkozy by 4 percent.
Massive strikes by public workers continue to scar the political landscape, and France's largely immigrant banlieues remain blighted by riots, rampant crime and public disorder. Around a quarter of young people in France are out of work, and the jobless rate is as high as 50 percent in some impoverished areas.
Sarkozy himself has received the worst negativity ratings of any French president since World War II, with six in every ten voters already describing his presidency as a failure, according to the Parisian daily Liberation. Even more damning, 70 percent of those surveyed in a Journal du Dimanche poll felt their premier had done nothing to "improve the situation of France and the French." The French leader has suffered a stunning fall from grace, and humiliatingly appeared on national television last week to give a 90 minute interview in defense of his government's mediocre record. He may well end up a one-term president.
It is little wonder that hordes of ambitious, young French workers continue to flee across the channel to capitalist England seeking jobs and better pay. It is hard to take a stroll in fashionable South Kensington in west London without hearing French spoken at practically every bustling street corner or café. There are at least 200,000 French expatriates working in the British capital alone, with tens of thousands more working and running businesses in the southeast of England. French entrepreneurs are making a significant contribution to the economy in London, from financial services to the burgeoning restaurant industry.
This drain in French talent is partly the fault of the gilded French political, social, and industrial elites, resistant to change and clinging to economic ideas that were rejected even in many Third World countries -- Botswana, for example -- years ago. As the Heritage Foundation/Wall Street Journal Index of Economic Freedom shows, France ranks 25th out of 41 countries in Europe, and is embarrassingly outclassed on the world stage by the likes of Trinidad and Tobago, Barbados, Georgia, and El Salvador. France's hugely powerful public-sector trade unions have also helped ensure that France remains one of Europe's least-competitive economies, while guaranteeing that workers can spend at least four weeks on the beach every year.
Some of the blame, though, lies at Mr. Sarkozy's feet. Not only has he lacked the mettle to push through significant reforms, but he continues to back socialist economic policies that undermine France and Europe's competitiveness. Sarkozy has failed to introduce any major labor reforms and has not launched a serious challenge to the preposterous 35-hour work week.
Nor has he introduced significant tax cuts, as he originally promised. As the EIU has observed, his pledge to reduce France's overall tax burden by more than four percent over five years looks increasingly unrealistic. Even Sarkozy's own labor minister, Laurent Wauquiez, admitted last week, "I'm awaiting a road map in the coming weeks and months that re-establishes the course of reforms that need to be led." So, apparently, is France's 30 million-strong workforce.
Perhaps the most disappointing aspect of Sarkozy's leadership has been his continuing strong backing of protectionism. He has shown little sign of reversing his long-held hostility toward foreign takeovers of French companies, a key feature of his election campaign. During the battle for the presidency against Segolene Royal, he attacked free trade as a "policy of naivety" and condemned the 2006 acquisition of French steel group Arcelor by British-based Indian businessman Lakshmi Mittal as a "waste."
Since taking office, the French president has been a powerful advocate of the EU Common Agricultural Policy (CAP), a huge, French-driven system of farm subsidies that raises food prices for consumers, costs European taxpayers tens of billions of dollars, and suppresses production by farmers in developing countries. In short, the CAP is the greatest barrier to free trade in the world and dwarfs all other protectionist rackets. The European Union spends over 50 billion euros a year on the CAP, accounting for over 40 percent of the EU budget.
France is a huge beneficiary, with its farmers receiving about a quarter of EU subsidies, or currently 9 billion euros a year. In a classic example of Orwellian doublespeak, Sarkozy's farm minister, Michel Barnier, told the Financial Times this week that the CAP model is good for African and Latin American countries, and they should emulate Europe's policy of subsidies and high tariff barriers. Barnier blamed the current world food crisis on "the consequence of too much free-market liberalism. We can't leave feeding people to the mercy of the market. We need a public policy, a means of intervention and stabilization." This is not the language of a reformist administration, but the anti-market rhetoric of a bygone era.
In Sarkozy's own words, in a speech to the European parliament last November, "the word 'protection' must not be forbidden in European democracy." Or, as he put it on a visit to Brussels soon after taking power, "Europe has to protect its citizens, not worry them. Europe has to prepare itself for globalization -- it can't just be overtaken by it. Globalization can't be a Trojan horse in Europe."
Ronald Reagan revitalized America as a great power. Margaret Thatcher restored British pride and turned her broken nation from the sick man of Europe into the continent's most dynamic major economy. Nicolas Sarkozy has a long way to go before he can make similar claims for his record as French president. So far, he has been heavy on spin, but light on delivery, more a showman than a political leader who can bring about change on the home front.
It is by no means clear that Sarkozy has the stomach for the fight, or even believes in the free-market reforms that are necessary to bring France back on its feet. When they led the United States and Great Britain, Reagan and Thatcher were conviction leaders, driven by a clear conservative ideology grounded in classical liberal thought. They believed in limited government, individual liberty, free trade, and low taxation. The French president, in contrast, seems rudderless and confused, talking the language of reform but implementing the doctrine of protectionism.
To his credit, Nicolas Sarkozy has rejected the overt anti-Americanism of his predecessors, and at times has been a helpful ally of the United States. But he must ultimately be judged on how he runs his own country. It is an illusion to see him as a Reagan or a Thatcher, and those who do will end up sorely disappointed.
Nile Gardiner is the Director of the Margaret Thatcher Center for Freedom at the Heritage Foundation.
First appeared in the National Review Online