Can MACRON save FRANCE from its CRISIS?

Many of you have requested us to make a video about France: on of the wealthiest countries
and, yet, one with the hardest economic problems in the entire World. Today, France is the
second economic power in the European Union. But that might last less that we might think.
Their young unemployment rate is over a 23% and their public debt is twice as big as their
entire GDP. Just 15 years ago, the whole world was buying Renault cars or Alcatel mobile
phones. Today, French exports have fallen to half of what they used to be. Their companies
can´t face the competition of their rivals in China, South Korea or even United States
and Germany. And as you can imagine, this economic crisis
has a reflexion on society. If you don´t believe me, just look at their presidential
elections of this 2017. None of the candidates from the traditional parties has made it to
the second round. Most of the French voters are fed up with their political stablishment
and this is why they´ve chosen a politician who wants to make a 180º shift in the French
system. So now you might wonder: What are the reasons
behind this French crisis? And most importantly What does Macron propose to solve it? Today
we are gonna answer to this question. But before, let´s take a look at history.
FRANCE IS TO THE FRENCH PEOPLE
Right after the Wold War II, all the European countries were on bankrupcy. France was one
of them. Half of the country was destroyed by the bombs and this included houses aswell
as factories and growths. Luckily enough, Uncle Sam was ready to help. At the end of
the day, United States was interested to have a strong Europe to buy all their goods. This
is why the so called MARSHALL PLAN was a big injection of billions of dollars for all the
European nations to be reconstructed. But hold on a minute! Because each of this
countries used this finance in different ways. For instance, German Government created their
own political theory: the ORDO LIBERALISM, AKA, social liberalism. This was a combination
of social programs and free enterprise. In other words, the Government would provide
a safety net for their citizens and subsidize the companies. But, on the other hand, those
companies where private and they could compete to each other.
France was the opposite case. The president back then, General Charles de Gaulle, was
no friend of free enterprise. So his political theory, the DIRIGISME, was pretty different
from that of the Germans.
“This cabinet is not for giving proposals but to give orders”
–Charles de Gaulle
So de Gaulle used all this Money from US to nationalize almost all the big corporations.
Steel factories, electrical companies, phone companies… even those car-maker behemoths
as RENAULT, PEAUGEOT or CITROEN had the Government as the biggest shareholder.
But not only that! They also created a DIRIGISTE system on society, where The State would play
a major role in all the areas, including the conditions to hire workers or the minimal
wage. This is very important for you to understand. Because not all the welfare states are created
the same. In Germany, for instance, there is no minimal wage and there is a bigger space
for trade unions and companies to negociate contract conditions. Healthcare is provided
by private insurance. And the regional governments have a lot to say when it comes to laws and
regulations. Nevertheless, in France, ALL of the social politics come from the Central
Authority.
In other words, De Gaulle represents the opposite to what we like here at VisualPolitik.
But despite all of that, during this first years after the World War II, France entered
the so called “Glory thirties”. In this 3 decades, the average wage tripled and those
companies, sponsored by the Government, became global leaders. Just for your understanding,
way before American companies started moving their factories to China, Renault and Michelin
where opening facilities in Spain, where salaries where much lower.
But let´s be honest, during that time, every European country was growing at the same rhythm.
Just think about it. We are talking about the 60s. Asia was not the economic powerhouse
it is today. Latino America was full of dictatorships of all kinds. And the Soviet Union could not
produce quality goods to sell in the international market. Nonetheless, France had an important
industrial tradition, a well educated society and, over all, rule of law and a stable political
system for companies.
Not only that! In 1958, those countries, already rebuilt by the Plan Marshall decided to create
a Free Trade Union, which would become the European Union. In this moment, France had
the biggest population. Don´t forget that, back in the time, Germany was divided in two
halfs. This means they were in the strongest position to negotiate their entering conditions.
And as I said, Charles de Gaulle was no good friend of free trade. So he used his power
to make France the dominating country in certain industries like agriculture.
Bien entendu, on peut sauter sur sa chaise comme un cabri en disant l’Europe ! l’Europe
! l’Europe ! mais cela n’aboutit à rien et cela ne signifie rien.
“One can shout Europe!, Europe!, Europe!, but it doesn´t help to anything, nor means
anything”–Charles de Gaulle
If you are watching this video from anywhere in Europe, you might have heard about Common
Agricultural Policy. This is a policy created to keep European consumers to buy agricultural
goods to the third World. But not only that! It also imposes production quotas INSIDE of
the European area. This means Polish or a Spanish farmers cannot produce or sell all
the milk they want. They must meet some maximum quotas imposed by Brussels. So guess what,
this is a French invention. And this explains things like this one.
“With a base price value of €70.4 billion in 2011, French agricultural production is
the leader in Europe.”
De Gaulle held power during decades. But the rest of the French presidents have kept this
DIRIGISTE model. At the end of the day, during the 60s and the 70s, France was on fire. So
if something works… Why should you fix it? Mmmm Now we are gonna tell you why.
SAME SOLUTIONS TO A DIFFERENT PROBLEM
The problem starts when the rest of the world runs faster than you. We are talking about
the 80s and the 90s. The Berlin Wall fell down, China started opening their economy
and lots of new countries, like Spain or Greece, became members of the European Union. And
of course, they also wanted to sell their products. In other words, out of a sudden,
France had rivals. And this is what explains why this kind of news are so common.
The same happens with other industries. Take a look at this chart that represents the trade
balance in France. If you pay attention, you can see how, after the 90s, the exports are
dropping slowly. This trend is specially strong after the finantial crisis.
Do you remember ALCATEL phones? When the mobile phones started becoming a thing, Alcatel was
a juggernaut in this industry. Now, they have just disappeared in a market dominated by
American, Chinese and South Korean companies. And this is just one example of how France
is losing their innovation track.
And now you might wonder… what has been the answer of all the different French governments
to all of this? Well, they just kept protecting their companies from the rest of the world.
For instance, other countries like Sweden had big like VOLVO CARS. Nonetheless, when
a Chinese Fund wanted to buy part of this firm, Government didn´t intervene at all.
They had it clear the separation between business and State. We cannot say the same in France.
Just look at what happened when PEPSI wanted to buy DANONE in 2005.
“Jean-Louis Borloo, the labour minister, said the government will do "all we can" to
oppose a bid, and Thierry Breton, the finance minister, pledged to protect Danone.”
But this is not the only thing that doesn´t change in France. Their social spending is
still the highest in all across European Union. Even bigger than that of the Nordic countries.
And the French Administration employs more civil servants than any other European Country.
And their salaries are pretty generous.
In other words: France has a lower income but keeps spending the same as they did during
the Glory days. This explains why their public debt is growing as much as it does.
But hold on a second! Because now it seems things are starting to change!
MACRON´S QUIET REVOLUTION?
Yes, we know it. One thing is what a politician promises during the elections and another
one is what he or she actually does. But there is something we have to admit in the case
of Macron: his program is a complete breakup with French Dirigisme. All the political analyst
have labelled this man as a moderate politicians who wants to continue the work of his predecessors.
But… is that really true? The truth is some of his proposals are absolutely
have never been heard by other French president, nor a right winger, nor a left winger.
For a better understanding, in a electoral campaign that became famous by the populist
tone of Mrs. Le Pen, Mr. Macron is proposing to retire over 120.000 civil servants. Yes,
many of you might thing this is horrible. But there is something we must admit: he is
being honest. There is no other politician who would suggest such an impopular thing
during the elections. Nonetheless, Macron has won this election by suggesting the opposite
of what a candidate should do. On his manifesto he also promises he will never reduce the
retirement age. In other words, he is really commited to reduce French public spending.
On the other hand, Macron combines all this Budget cuts with lowering taxes and helping
small companies. On his own words, Macron wants to substitute the French dirigisme by
a model closer to that one of Germany or Sweden, where welfare states coexists with free market
economy.
And now you might wonder… even after winning the elections… Does he have actual power
to make this happen? In France, the President has not so much power as in America. And every
law he wants to pass should go through the parliament. And… Who is the biggest political
force on this parliament?
Well… the truth is we will not know it until this summer. This June of 2017, French people
will go back to the voting stations. This time they will hold legislative elections.
And here, the party of Marine Le Pen, the NATIONAL FRONT, has bigger changes to become
the main force. But… what does the French far right wing want? Well… if you wanna
know it, you should click on this video.
And now the question is Do you really believe this quiet revolution of Emmanuel Macron can
put France out of the hole? Do you think French stagnation has a solution? You can leave your
answer in the comments below.
And don´t forget we publish brand new videos every Monday and every Thursday so don´t
forget to hit that subscribe button so you won´t miss any post. And if you liked this
video, give us a thumbs up. And as always, I see you next time.

Can MACRON save FRANCE from its CRISIS? - VisualPolitik EN

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