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mattsurf
Joined: 28 Sep 2016
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Location: Zug, Switzerland
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 Posted: Fri Dec 07, 2018 11:57 am Post subject: France is getting Ugly |
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While the UK is concerned with Brexit, the top news in Europe is the situation in France. Many people are concerned that France is heading for a long period of unrest, that could even escalate into something more serious.
The real elephant in the room is that the French economy is screwed; it is unable to afford its pension liabilities, unemployment in rural France is dire, and for those who have jobs, they are mainly low skilled manual jobs.... however, the French want reform, they want early retirement, generous pensions, generous welfare and lots of cushy state jobs, all paid for by the rich... and it appears that they want to use violence to get what they want
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Jorgan
Joined: 12 Nov 2007
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Location: alles was ich bin, alles was ich war
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| Posted: Fri Dec 07, 2018 1:07 pm Post subject: |
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I pity them to be fair. This morning there was a guy being interviewed on R4; since 2000 his disposable income has decreased such that he can no longer afford to eat out, or take a 2 week holiday... only a week in May apparently.
Meanwhile in Africa and the Middle East.
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GrahamO
Joined: 10 Apr 2005
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| Posted: Fri Dec 07, 2018 1:23 pm Post subject: |
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You mean the French are revolting ? 
They are reaping what they have sowed over decades.
I can't say I am sorry when debtors get the bill.
But I do wonder where the French rich will go to when they decide to leave France as taxes rise, when the UK might look at them and ask what skills they have .... and they should join the queue to come to London
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explorerJC
Joined: 20 Oct 2005
Posts: 16060
Location: Farthingstone
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| Posted: Fri Dec 07, 2018 1:31 pm Post subject: |
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this is one of the problems of blaming populism instead of understanding and rectifying the cause...
France has been in decline for a while, for many reasons that i haven't time to consider properly to write in a short statement, but its core industrial income - transport - has declined without being replaced by investment in modern technologies...
combined with very low productivity (in terms of overall output), a falling birthrate and a heavy burden on the failing infrastructure brought about (in part) by failed integration of refugees and migrants...they are in deepsh1t...
thankfully though, they only owe 90 odd% of GDP....at least they are not Italy...
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Jorgan
Joined: 12 Nov 2007
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Location: alles was ich bin, alles was ich war
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| Posted: Fri Dec 07, 2018 1:41 pm Post subject: |
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I don't know what the boeuf is, look at all that room they have over there. Although not as much as Texas.
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GrahamO
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| Posted: Fri Dec 07, 2018 2:04 pm Post subject: |
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Their boeuf is their advantage and their weakness.
It costs an absolute fortune to keep world class infrastructure across such a vast country, and they expect to get iot for pennies and be completely totally overmanned so that ever farmer with one field, one cow living off the CAP, has his own personal state funded advisor sitting in an office somewhere awaiting a call.
How the world economy thinks of France .... http://www.mining.com/how-stupid-do-think-we-are-tire-ceos-epic-letter-to-a-french-minister-77806/
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explorerJC
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mattsurf
Joined: 28 Sep 2016
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Location: Zug, Switzerland
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| Posted: Fri Dec 07, 2018 3:34 pm Post subject: |
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In the 1980, the UK, under Thatcher broke the unions, in doing so destroyed UK Manufacturing, but replaced it with a very strong service sector
France has never taken on the Unions, but has supported its manufacturing and state sector
Despite what GrahamO says, Productivity in France is pretty good, around 20% higher than the UK, but salaries are also higher, which does offset some of the difference
https://www.ft.com/content/f372cbb8-4a96-11e7-a3f4-c742b9791d43
The issue in France is Globalisation, French manufacturing is competing with low cost countries like China and Vietnam, and against highly productive countries with less union issues like Germany, while the services business in the UK are facing less low cost competition (for now at least)
This is leading to low growth in France and high unemployment
France also has a pension time bomb, until relatively recently the French were actively discouraged from taking personal pension provision, people made large contributions to their state pensions..... which have all been spent on maintaining an unrealistic level of state employment. Now the state is saying, correctly, that it cant afford to pay the pensions that most people have paid into.
Every election, France lurches between left and reform, they bring in people like Hollande, who promise a continuation of the "French social model" and then fail to deliver, so they bring in Sarkozy or Macron, who promise reform, but then find reform to painful to deal with
I see 2 potential outcomes for France
First is the Macron is France`s Thatcher, hugely divisive and destructive, but ultimately provides France a new paradigm to build from
Second (and much more likely), the next election in France will be fought between the communists and the National Front, and this is a massive issue for Europe, and the UK, whether we are in or out of the EU
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explorerJC
Joined: 20 Oct 2005
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| Posted: Fri Dec 07, 2018 4:22 pm Post subject: |
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| mattsurf wrote: | In the 1980, the UK, under Thatcher broke the unions, in doing so destroyed UK Manufacturing, but replaced it with a very strong service sector
France has never taken on the Unions, but has supported its manufacturing and state sector
Despite what GrahamO says, Productivity in France is pretty good, around 20% higher than the UK, but salaries are also higher, which does offset some of the difference
https://www.ft.com/content/f372cbb8-4a96-11e7-a3f4-c742b9791d43
The issue in France is Globalisation, French manufacturing is competing with low cost countries like China and Vietnam, and against highly productive countries with less union issues like Germany, while the services business in the UK are facing less low cost competition (for now at least)
This is leading to low growth in France and high unemployment
France also has a pension time bomb, until relatively recently the French were actively discouraged from taking personal pension provision, people made large contributions to their state pensions..... which have all been spent on maintaining an unrealistic level of state employment. Now the state is saying, correctly, that it cant afford to pay the pensions that most people have paid into.
Every election, France lurches between left and reform, they bring in people like Hollande, who promise a continuation of the "French social model" and then fail to deliver, so they bring in Sarkozy or Macron, who promise reform, but then find reform to painful to deal with
I see 2 potential outcomes for France
First is the Macron is France`s Thatcher, hugely divisive and destructive, but ultimately provides France a new paradigm to build from
Second (and much more likely), the next election in France will be fought between the communists and the National Front, and this is a massive issue for Europe, and the UK, whether we are in or out of the EU |
i understood that French productivity was good when they were working...but didn't account for the down time...
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explorerJC
Joined: 20 Oct 2005
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| Posted: Fri Dec 07, 2018 4:34 pm Post subject: |
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| mattsurf wrote: |
Second (and much more likely), the next election in France will be fought between the communists and the National Front, and this is a massive issue for Europe, and the UK, whether we are in or out of the EU |
between a roche and an endroit difficile...
or, of course, they could use their historic skills for enlightenment and realise that there could be a better way than the continued pursuit of growth...
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GrahamO
Joined: 10 Apr 2005
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| Posted: Sat Dec 08, 2018 5:48 am Post subject: |
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| mattsurf wrote: | | In the 1980, the UK, under Thatcher broke the unions, in doing so destroyed UK Manufacturing, |
BS - it was already dead and only existed off state support.
All Thatcher did was stop wasting state money on supporting a corpse.
You'll find car manufacturing arose from the ashes, primarily driven by the Japanese whose condition with HMG was that there would be no unions in the factories. This resulted in the Japanese opening multiple plants across the Uk and the workers doing a really good job once the unions were stopped from killing the companies.
Eventually the unions were allowed back in, but only once the original 70's dinosaurs had retired and the unions were run by sane people.
French productivity in some of their industry is good, but its dragged down overall by massively uneconomic activities elsewhere.
Its like being in a 400 metre race and being the fastest over the first 50 metres, but kep stopping for a break while everyone else carries on, and then you go home, have a month off and come back when you feel like it and then complain that it isnt fair you lost the race.
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explorerJC
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mattsurf
Joined: 28 Sep 2016
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Location: Zug, Switzerland
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| Posted: Mon Dec 10, 2018 7:57 am Post subject: |
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| GrahamO wrote: |
French productivity in some of their industry is good, but its dragged down overall by massively uneconomic activities elsewhere.
Its like being in a 400 metre race and being the fastest over the first 50 metres, but kep stopping for a break while everyone else carries on, and then you go home, have a month off and come back when you feel like it and then complain that it isnt fair you lost the race. |
Overall French GDP per head is higher than the UK
However I agree that there is massive inefficiency in France, which means that the state wastes a huge amount of money.
The UK has really not supported manufacturing well, in the 1990s, Britain had the largest semiconductor industry in the world, that has largely disappeared, while Germany has retained and grown its semiconductor industry
Companies like GEC Marconi, employed 50,000 people in the UK in the 90s, but ended up closing its UK sites, while retaining its Italian production, even though it was less efficient
While the UK did have lots of very poor manufacturing, there was never a strategy to retain and grow the elements that were good.
Automotive is highly symbolic, it gets far more focus than the value that it really adds to the economy, as most of the value add is done outside the UK. It is also highly risky, with massive over production capacity in Europe, so a factory which is here today can easily disappear, like the Peugeot plant in Ryton, which was their most efficient assembley
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Chrace
Joined: 28 Apr 2010
Posts: 2910
Location: Eating a Yorkie
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| Posted: Mon Dec 10, 2018 10:12 am Post subject: |
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France has just overtaken Denmark as world's highest tax (counted as state tax income / GDP).
But the pension is the crux of it really. It's hitting all over Europe with the babyboomers getting older and a dip in who pays for them. The list of requirements from maillot jaune said it all really - lower tax, lower pension age, higher pension. Not economically viable requirements but it's been lurking ever since I lived in France in 2003.
It's particularly bad in France due to the way the country is structured around pensions and public sector, and how little they have done about it politically. Most of the uprising in the past 20 years have been linked to political pension reforms. But at least a few ruling parties have managed to chip at it - but never lasted very long afterwards.
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Jorgan
Joined: 12 Nov 2007
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Location: alles was ich bin, alles was ich war
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| Posted: Mon Dec 10, 2018 10:45 am Post subject: |
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Let them eat cake.
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