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France inaugurates a new president next Tuesday. A change in leaders belies a continuity in policies. Just don’t say that to incoming president Francois Hollande—or the politician he vanquished this weekend past.
Echoing a victory speech of his soon-to-be counterpart in the United States, Hollande cast his election as momentous event igniting hope around the planet. “May 6 should be a great date for our country, a new start for Europe, a new hope for the world,” the victorious French presidential candidate announced to supporters at the Bastille. “I’m sure in a lot of European countries there is relief, hope that at last austerity is no longer inevitable.”
Can something so avoided really appear so inevitable?
The word “austerity” is oft spoken in Europe but little applied. This is especially true in France. Hollande promised change from these last lean years. But without exception government spending increased annually during Nicolas Sarkozy’s five-year presidency. Real change would mean implementing austerity, not jettisoning the mere suggestion of it. Sarkozy’s tenure experienced austerity among citizens. But the government economy consistently expanded even as the private economy occasionally contracted.
Could the contrasting trajectories of the public-private fortunes be correlated?
Just 17 of the world’s 210 governments grab more in taxes from their people than Sarkozy’s government grabs in France. Reasons abound for the draconian taxation. France under Sarkozy doles out more in social spending than each of the 27 European Union member states save Denmark and Finland. Though Air France had been partially privatized by the time Sarkozy took office in 2007, state-owned ventures persist in the series of France Télévisions stations, the Paris Opera, the French Rail Network, and the utility giant Electricity of France. The state generously funds higher education and health insurance, making the price of tuition and doctor visits nominal.
Free has proved expensive. Taxation absorbs 49 percent of the French gross domestic product. France’s debt-to-GDP ratio, which approaches 90 percent, has made the cost of borrowing more costly as Fitch and Standard & Poor’s have recently downgraded the nation’s credit rating. The nation’s deficit has decreased over the last year. But this has more to do with increased receipts than with decreased disbursements. France’s economy is in worse shape than America’s. Stagnation in both instances has coincided with a spike rather than a slash in spending.
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