Jay Bhattacharjee: A gust of wind in France

A gust of wind’ is indeed an appropriate phrase to describe the French Presidential elections from an Indian perspective.

When the Indian Air Force announced its decision recently to select the Rafale fighter, many defence analysts in these shores did not investigate whether the plane’s name meant anything. If they had, they would have learnt that it signifies, in French, a sudden gust of wind or a squall that blows away people and their homes.

The Rafale’s manufacturer, the Dassault group, a show-case of French high technology, could not possibly have predicted such a strong gust of wind blowing through the corridors of the country’s polity and society in the last few weeks. Certainly, the top-drawer Dassault family were very close to Nicholas Sarkozy and his party, and would not have expected such a massive outburst of public disapproval of the man once touted as a French Kennedy. Le Figaro, a Dassault-owned newspaper, appeared shell-shocked when the final results were announced last Sunday night. Even after Sarkozy conceded defeat and issued the customary felicitations to François Hollande, the next President of the Republic, the faithful journal was toiling away to present a favourable gloss to the entire episode.

Before we look at the immediate events and the reasons for Sarkozy’s debacle, it would be useful to place them in the context of France’s culture and social history. Indeed, the notion of la spécificité française (very inadequately translated as “the special nature of France”) may sound banal, since every country and society is special and unique. However, there are indeed some uniquely French characteristics that defy and baffle the Anglo-Saxons, whose views are often transmitted to India without much filtering.

For example, in the cerebral sphere, the French are much more adept at abstract ideas than their cousins across the Channel and the Atlantic. In the political field, their attachment to a strong central state goes back to Louis XIV and the pre-Republican era. Whatever may have been done recently by setting up “régions”, and giving them some limited powers, let us make no mistake: this is a highly centralised and unitary state, totally unlike the United States, Switzerland or even India. The Revolution, of course, brought about profound changes in the mindset and psyche of the people. The much-discussed idea of valeurs républicain (republican values) is always present in public discourse. Apart from the themes of liberty, equality and fraternity (now associated, worldwide, with France), there is also the equally cherished concept of laïcité, which again conveys itself quite inadequately in English as secularism. It is actually much more — a complete and unquestioned separation of religion and state.

In the economic and industrial sphere too, there are many examples of unique French characteristics. In the aftermath of the last war, which left the country totally traumatised, France went on to build a strong infrastructure base, internationally-admired defence and heavy engineering sectors and certain high-technology areas. All this has come about through enormous (and selective) public sector investments in core industries. For example, the country's railway system is unparalleled in its technical excellence. So are its roads and electricity supply systems. After the Yom Kippur war of 1973, the country decided to switch to nuclear power that now accounts for more than 70 per cent of total electricity supply. The quality of France’s nuclear industry is so high that it also has the cleanest air in Europe.

All this has come about because of a highly complex but very carefully-structured relationship between the government and the private sector. The French social security system is omnipresent and very efficient. The citizens have a health and medical care system that has been voted as the world’s best for many years by the WHO. All this, naturally, comes with costs — the country has a high taxation regime, as well as high rates of social security charges.

The fault-lines in the last two decades have been obvious. The French private sector (and some public sector organisations) rapidly degenerated into crony capitalist aberrations. Both the main political groupings have to share the blame for this, including Mitterand’s socialist dispensation. With President Chirac, the shenanigans increased; and under Nicolas Sarkozy, many French companies took ill-conceived measures to move their industrial operations to supposedly low-cost countries. This one theme of delocalisation alienated the working class inalienably from the ruling UMP.

Another factor was at work. This was the irresponsible international lending by French banks. Along with their German rivals, the large banks in France built up enormous debt portfolios in Greece, Spain, Italy and other countries, where the pickings were initially attractive but inherently risky. The sovereign debt crisis in Europe has uncomfortable parallels with the American sub-prime crisis five years ago. The problem is that the European business community was conforming exactly to the prognosis of Hyman Minsky about the traits of financial capitalism. Minsky, once a fringe thinker, is now widely studied everywhere, including his native America.

Sarkozy’s solution was to tag along with the German Chancellor Angela Merkel and to proclaim an austerity package to his citizens. This was extremely naïve. To expect his electorate to buy this shock treatment did not do justice either to Sarkozy, or his advisers. Therefore, when he was confronted by Hollande, who propounded all the ideas that the French people were comfortable with, the result was inevitable. Indeed, France may well be a beacon here — one German state has also voted against Merkel in the last few days. The new regime in the Elysée Palace looks likely to usher in a new European order.

The author is a Delhi-based corporate and business analyst