FRENCH REFORMS

Because of the crisis, the pace of reform must be speeded up, not slowed down.

I want to tell the French that there is no miracle solution allowing our country to dispense with the necessary efforts to overcome the crisis.

Of course, we must start by thinking about the most vulnerable whose lives are already not easy when there isn’t a crisis, but whose lives are unbearable in times of crisis. It’s in these moments that we have to show the greatest solidarity with those in difficulty. This is why I took the decision to create the RSA, the minimum vieillesse and the most modest reversionary pensions and to grant those on the minimum welfare benefits, whose purchasing power isn’t guaranteed, unlike those with family allowances and retirees, an exceptional allowance to make up for the fact that their benefits aren’t keeping up with the real increase in prices. When you want to tell the French the truth, you have to tell them the whole truth, and the truth is that the State can’t go on forever financing its current spending and spending on solidarity by borrowing. One day we have to pay our debts.…

So to restore some room for manoeuvre in order to prepare the future, the State’s operating expenditure has to fall. Next year the civil service will shed an unprecedented total of 30,600 jobs. The revision of public policies will be pursued very swiftly.…

After the radical revision of the "judicial map" [location and jurisdiction of French courts] and restructuring of the military bases, we will go further in the reorganization of our government departments and public services. So next year, we are going to start phase two of this reform.

And I announce that we’ll start work on the major reform of our local authorities in January. The time has come to think about the number of our local government levels — their number and overlapping responsibilities is a source of inefficiency and additional expense. Our economy absolutely must be competitive. If we want a competitive economy we can no longer make it bear an excessive public expenditure burden. I shall shoulder my responsibilities vis-à-vis the staff reductions and reform of French local government levels. We’ve been talking about it for too long; now we’re going to act, we’re going to take decisions.

But here too I owe you the truth: in the current economic situation I won’t pursue a policy of austerity because austerity would exacerbate the recession. So I won’t accept rises in tax or social security contributions which would reduce the purchasing power of the French. Since our goal is to give the French back purchasing power, not reduce it.

I won’t agree to increasing charges on businesses because that would weaken their competitiveness when, on the contrary, it should be strengthened.…

France will pull through not by working less but by working more.…

The government has put an end to the extremely harmful consequences of the the 35-hour week. We have removed tax from overtime pay. We have kept tax exemptions on low wages. We have brought in the RSA and boosted statutory and voluntary profit sharing. There is a main thread running through all these measures: ensure lower business labour costs, that work pays, the labour market is freed up and work is rewarded.…

The forthcoming Act on statutory and voluntary profit sharing is wholly consistent with this goal of restoring the balance between capital and labour. By not giving all the benefits to company directors and shareholders, but instead giving a greater share to those who through their labour have created the wealth, restoring employees’ purchasing power without increasing their companies’ fixed costs and thus putting capitalism back on the right track, this is the other revolution we have to undertake.

Need I add that in the present global economic situation, anything which could contribute to increasing labour costs would be altogether suicidal.…

The other face of capitalism needing a boost in value is the entrepreneur. On one side there is financial capitalism and on the other entrepreneurial capitalism. Alongside the labour value, we have to put the spirit of enterprise back at the heart of the economy’s value system. That’s the whole philosophy behind the Act on modernizing the economy and it’s the economic policy priority.

We have to support the worker’s efforts, as opposed to the speculator’s easy money, we have to support the personal commitment of the entrepreneur who risks everything in his/her business, as opposed to the anonymity of the financial markets, we have to support a production capitalism as opposed to a short-term capitalism, we have to accord priority to industry just when the financial noose is loosening, that’s the whole purpose of the economic policy we want to pursue.