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Competition and Freedom: the secrets of a possible French success story

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The French Minister of the Economy, Emmanuel Macron, presented his bill for economic activity and equal economic opportunities to the Council of Ministers on Wednesday 15 October. He attacks the "rigidity of the French system" which, according to him, prevents "liberating, investing and working". "The problem is not the French, but the rigidities of the system."he insisted.

Xavier Fontanet, former Essilor President, knows that his ideas are disturbing and he likes it. An optimist, he thinks it's a way to get the lines moving, even if the political world, in particular, is moving more slowly than he would like. His new book, which will be published in September 2014, defends an idea that is as confusing as it is provocative, and he makes it without any oratory precautions: "We must buy back Brittany! "Then, he says: "As the Basques did with Spain. We can make a saving of 520 billion euros in this way. But we need to find 250 billion, so all we have to do is implement half of the ideas I am advocating. » A look back at his speech in June at the Collège des Bernardins and his book, which perhaps the Minister of the Economy should read?

What's this all about?

Brittany would be a "pilot region", as one person in the Collège des Bernardins audience observed, which would apply all or part of the reforms tested here and there. "The Bretons would work 44 hours a week, they would retire at 70 and the region would take over part of the social, public sphere and the debt".says Fontanet. Of course, "Brittany would remain French", it is by no means "a secession" as it has already been reproached, but rather a system "cantonized" to Switzerland. The Helvetic Confederation is, according to him, " an extraordinary case of good regional management where all the regalian functions are taken care of at the canton level."

But why did it come to this?

Because the situation is serious. Fontanet recalls key figures. France has "a cataclysmic public debt of 2,000 billion euros", "a public sphere of 57% of GDP",
"As a direct consequence of this excessive taxation, "foreign direct investment fell by 77% in 2013".
Fontanet drives the nail in with an image borrowed from horse racing: " Fat jockeys can't win the Arc de Triomphe prize."In other words, the plethoric state does not allow France to be competitive. And "when the richest leave, it's the worst news for the poor. We're the only country in this situation. »

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Whose fault is that? Well, no major surprise there. His diagnosis is severe but rather classic. Like many others, he denounces excessive social security charges, the exorbitant cost of working hours, retirement at 60, the 35-hour week, excessive taxation on the richest people, etc. He also denounces the excessive tax burden on the richest people. "on the verge of spoliation."and the economic policies pursued by all successive governments since 1980, "from right to left".
However, according to him, if the public debt started to increase in 1974 it was not due to the 1973 oil shock as is generally accepted. "This corresponds to the coming to power of the Enarchs and Keynesianism."he says, picking up one of his mischievous little smiles. To reinforce his position, he mentions Switzerland, "which has no energy resources and whose public debt continued to fall after 1973. So the oil shock is not the right explanation. »

How do we get out of this?

Fontanet's solutions are iconoclastic, at least in France, because they have already proven themselves abroad. Indeed, Fontanet, French but also citizen "of the 6th continent, that of the global companies that represent another planet", borrows its solutions from three countries: Germany, New Zealand and Canada. And he pays tribute to three men, three heads of government, whose political courage he salutes, Gerhard Schröder, Roger Douglas and Jean Chrétien.

First Germany, to which France is often compared, has largely reformed the field of work. The evolution was made in three points: the creation of the variable permanent contract which allows a company to reduce the weekly working time within the framework of a permanent contract but avoids massive layoffs, - the creation of the variable permanent contract which allows a company to reduce the weekly working time within the framework of a permanent contract but avoids massive layoffs, - the creation of the variable permanent contract which allows a company to reduce the weekly working time within the framework of a permanent contract but avoids massive layoffs, - the creation of the variable permanent contract which allows a company to reduce the weekly working time within the framework of a permanent contract but avoids massive layoffs. "a great solution." invented by Hartz, Volkswagen's human resources director in the 1990s -, the ICH-AG status, i.e. the auto-entrepreneur model copied by Hervé Novelli in the Fillon government, and finally the mini-jobs.

New Zealand is another country that has reformed its health care system from top to bottom. Prime Minister Roger Douglas, "a socialist turned realist" according to Fontanet, has distinguished three categories of expenditure: the small, lower expenses that all citizens, regardless of their income, have to pay, the very large expenses paid by the state, and the intermediate expenses that are covered by private insurance, based on the simple principle that people who take care of their health will pay less than those who neglect it. For example, a heavy smoker pays more for his or her insurance. On the other hand, those who have regular medical check-ups pay less, which quickly boosted the number of medical visits.

Finally, Canada, which in the mid-1980s cut the federal budget by 20 % - thus choosing to save money rather than raise taxes on the one hand, and to make drastic and targeted cuts rather than general minimalist grooming on the other.
As a result, public expenditure, which represented 57 % of GDP in 1990, fell to 40 % in 2005 and the public debt, which had reached 50 %, is almost zero today. However, Fontanet immediately notes, with regret,that "François Hollande's France has just done exactly the opposite! »

(Source: ©Pôle de recherche Collège des Bernardins - Observatoire de la modernité - Speaker: Xavier Fontanet - Synthesis: Catherine Dupeyron - July 2014)

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