Sunday, October 27, 2013

Why the hostile reactions to my Telegraph article highlight France's deep divisions

Left-wing commentators are wrong to criticise my article in the Telegraph about the exodus of French entrepreneurial talent, says Anne-Elisabeth Moutet

Criticised: Anne-Elisabeth Moutet was told: 'Stories like yours are nothing but a massive swindle’ Photo: Lucas Schifres

Since last week, when my Sunday Telegraph report outraged France (“British propaganda!” was a recurring theme) by suggesting that my demoralised compatriots were leaving in droves, fleeing an economy overburdened by regulations and levies, François Hollande’s government has added three new taxes to the 84 that had been created in the past two years.

Not only will capital gains on a series of popular savings plans be now subject to a 15.5 per cent flat tax, but also the measure is retroactive all the way to 1997 – coincidentally (perhaps) the last time France elected a Socialist government before this one.

It would be unfair to say that the irony went unremarked. The dozens of reactions I heard – as well as the thousands of internet comments and Twitter and Facebook shares of my story – mirrored the state of deep division in which France finds itself.

Entrepreneurs are “really hunted away from the country”, wrote one correspondent, and specifically targeted by “many stupid decisions. One example: I created a business seven years ago; if I sell it now, I will have to pay 60 per cent of the value I’ve created. Unfair and discouraging.”

Another correspondent wrote: “Would not change a word: we are now in decline, and may never be able to regain the place of fourth-largest economy in the world.”
“The people who really drive the French economy and keep the country afloat are those in managerial roles or the professions, who know little or no job security or social protection, working in those highly competitive parts of the economy comparable to Britain or the United States,” said another commenter. “But they are tiring of supporting the unproductive masses.”

Last week, the ministry of finance, prompted by opposition MPs, released official emigration figures for 2011 (they assure you nothing more recent is available) showing that departures had doubled from the previous year to nearly 40,000. Professor Jacques Régniez of the Sorbonne, himself a statistician, predicts that these should have climbed to 60,000 by the time we get this year’s figures.

In the November-December issue of the foreign-policy journal The National Interest, the US economist Milton Ezrati published a damning, comprehensive study of the downfall of the French economy. “Whereas 10 years ago it rivalled Germany’s,” he wrote, “today, France produces only half the value added. France’s share of global exports has fallen from 7 per cent in 1999 to only 3 per cent today. During this time, its share of the eurozone’s exports has fallen from 17 per cent to merely 12 per cent.” France, Ezrati explains, is now outperformed even by Italy.

Like others, Ezrati blamed over-regulation: there are now so many complex and protective labour laws, the Code du travail (labour code) exceeds 3,200 pages. He also quoted a recent authoritative OECD study that identified “French failings in almost every major category: economic regulation, product regulation, impositions by local policies, state control of the details of business operations and barriers to entrepreneurship”.

The only area in which France didn’t blatantly underperform was, unsurprisingly, red tape: French bureaucracy barely reaches the OECD efficiency median.

You would think something of this would filter up to Hollande in his Elysée bunker – he might disagree on the diagnosis, yet worry on the souring of the public mood. You would be wrong: “Perception is reality”, the mantra of spin doctors around the Western world, leaves the President cold. Increasingly, his entourage reports that Hollande, despite hiring a communications team headed by a popular former France 2 prime-time news presenter, Claude Sérillon, believes he knows best how to speak to the French. “This may have worked for de Gaulle,” says Philippe Moreau-Chevrolet, a political communications expert. “Not for Hollande.”

The beleaguered president, whose unpopularity figures scale new heights seemingly every week, still enjoys a vocal, if ever-diminishing, constituency, who, when they do oppose Hollande, reproach him for not being tougher on “the rich”.

Many of these work in the media, and as I defended my story on various radio and TV panels all week, I encountered an interesting assortment of them. (I have become something of a rent-a-reactionary in the French media, where a “balanced” panel means three Left-wingers et moi.)

There was the France Inter (think Radio 4) hour-long programme in which Sibylle Vincendon, a senior editor of the newspaper Libération, called all critics of the economic and political situation “grumpies”. (She has a book out on this theme, Pour en finir avec les grincheux. By the third page of the introduction, the despicable “Anglo-Saxons” and their “free-trade” model have been introduced. Vincendon believes that anyone, especially an economist forecasting France’s decline, is evidencing a deep schadenfreude and dark motives. The French, she says, need to “share more, not less”.)
Anne-Elisabeth Moutet's reply to her critics in Sunday's Telegraph

There was the debate on Arte, the French-German cultural public channel, in which the right (by which I mean Left) kind of economist, Prof Benjamin Coriat, explained that instead of the 75 per cent supertax hitting “only” a few privileged citizens, national income tax should be raised well above the current 45 per cent marginal rate, so that “everyone will pay”. Prof Coriat is shocked that some people dare to oppose new taxes. “They’ll justify anything not to cough up!” he thundered. He deplores the kind of movements now emerging, such as Les Pigeons (a group of young entrepreneurs who oppose over-taxation of start-ups), and the fact that some politicians listen to these “bad citizens”.

Elsewhere, I was told that French emigration to Britain was “a myth”, the figures “too low to even consider”. In an online chat, I was asked why I wrote in English, implying that I was some sort of traitor. (“Because it’s more fun?” didn’t seem to cut it as an answer.)
Many went on the attack: “Stories like yours are nothing but a massive swindle,” a Le Monde Diplomatique editor told me. “For people leaving France, how many come back after experiencing the lack of public services in Britain, the inefficient Tube, the expensive, slow and badly maintained trains, the threadbare NHS? It’s France that is bearing up best in the crisis, not Britain: why do you think the richer of the English come to French doctors and hospitals for proper treatment when they’re ill? Britain has no industrial base to speak of: it only exists because of tax-rate dumping, the City of London, and those nice, honest financiers operating there. Britain is a terrible place to live except for the super-rich.”

France has remained in a thrall to Marxism to a degree that is rarely matched elsewhere in Europe. While Germany, Italy and, in Britain, New Labour, swore off it, Hollande’s Socialist Party never officially renounced it, in good part not to offend its Leftist frenemies, of which there are many, who still Believe.

In addition to the rump of its once-powerful Communist Party, France has three Trotskyite mini-parties, a Green nebula, and one upstart radicalised splinter from the Socialists, led by a charismatic philosophy teacher, Jean-Luc Mélenchon, who ran for president against Hollande in the first 2012 round, and scored a very respectable 11 per cent, coming fourth behind Hollande, Sarkozy and Marine Le Pen.

Because, for years, any Socialist candidate has needed all of the extreme Left votes to win, the language of economic realism has never gained traction on the Left in France. In private, the prime minister, Jean-Marc Ayrault, will describe himself as a social democrat. Ask him to repeat it on the record and you are faced with a stony glare, lest you create a political crisis for him and his boss. As a result, the political tone on the Left has remained frozen in a kind of Seventies radical aspic, a hoary kind of time travel in which every capitalist, every entrepreneur, every high-net-worth individual is guilty of starving the downtrodden masses.

“I left because I was tired of being considered little better than a criminal,” says a French banker who is now happily ensconced in a Soho loft with his family. “At a pinch, I could have paid the silly taxes; but it was the constant sniping, the feeling that I had to apologise for everything I achieved, the jealousy, the unremitting gloom, the guilt heaped upon you at every turn; and the idea that my children would have to grow up in a country where, at best, they could hope to become top civil servants, and duplicate the system with no deviation from the norm.

“This president has no idea that there is a wide world outside France; he has hardly travelled abroad; he speaks no other language; and he has no curiosity. Eventually, you get tired of waiting for our rulers to wake up.”

© Telegraph Media Group & Anne-Elisabeth Moutet, 2013

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