ECONOMY

When the economy is not to blame

One can easily conclude that it was not only the debate on security but economic issues as well that contributed to French voters’ behavior during the first round of the presidential race. After all, this is what usually happens in most countries. This conclusion is actually a truism, since everything is interconnected with the economy. Unemployment, or, if you like, the need to adapt the available workforce to the needs of production and those of competition among national economies, insufficient pensions, the tax burden and the quality of state services are some of the many economic issues that impact on the voters’ mood. They shape the way they will face other aspects of society and, therefore, will determine their political choices. The French «paradox,» experienced in a way also in Greece, is that the economy is doing rather well, the necessary reforms went quite smoothly, the opening up of markets has left relatively few victims in its wake and the euro has helped, rather than damaged, citizens’ purchasing power. All seems to be changing for the better. But things are not so simple. As Christian Blanquet, chief economist at Credit Agricole, says, the French vote was deeply political and only indirectly affected by economic developments. The cohabitation of a right-wing president and a leftist government has created confusion about who makes decisions. There is also much reflection about traditional state entities, like the presidency and Parliament. The French economy is performing quite well. Gross domestic product grew at a fast pace in 2000 and 2001 and high growth is expected to resume in 2003. The labor market is more adaptable and has been creating more jobs, remarks Blanquet. The restructuring of the economy has been going well and there are several French enterprises doing very well on international markets. The role of the state has changed. It now focuses on health, education and infrastructure building; the French, though, appreciate the quality of services provided and are willing to accept the extra cost. Blanquet remarks that it is not a coincidence that the reaction against globalization comes during a good time for the economy, because such complaints usually emerge during times of consolidation of reforms. The population has made sacrifices to help reforms succeed, including a stagnation in wages, and discontent has been expressed with a time lag. Insecurity is not exclusively related to the rise in criminality. It also has to do with issues such as food safety, the environment, market instability and international conflict. The French do not like the fact that many decisions are now taken at a supra-national or global level. This creates anxiety in a people who expect everything from their own government. They are afraid that the quality of their lives will suffer. The worst, perhaps, is that the politicians themselves failed to explain the changes under way, and their necessity and/or inevitability. For the above reasons, the study recommends that the largest possible EU participation be sought in the financing of the project. Already, a 20-percent subsidy has been approved for the Greek segment under the Third Community Support Framework, while a further 20 percent will be the national contribution. The Turkish side has also expressed the wish for EU funding, and Development Minister Akis Tsochadzopoulos said recently that this was approved following a Greek recommendation. The study also advises that the project be incorporated as much as possible into the two national grids in order to minimize unit costs.