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French report French report
by Euro Reporter
2011-12-29 10:36:14
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France and Germany still divided

Two landmark speeches in two days were supposed to highlight France and Germany's determination to bring about a resolution to the euro crisis. Instead, they have highlighted how divided France and Germany remain. Both Angela Merkel and Nicolas Sarkozy agree on the severity of the crisis, the inadequacy of the European Union's current governance arrangements and the need for Treaty changes and new fiscal discipline. But they remain as far apart as ever on how this should be achieved. President Sarkozy's speech on Thursday was a re-statement of traditional Gaullism, perhaps reflecting the electoral threat he faces from the National Front in next year's elections. He stressed the primacy of the nation-state and that fiscal discipline should be enforced via intergovernmental arrangements. In contrast, Chancellor Merkel's speech on Friday reiterated Germany's belief that a system in which the sinners continue to judge themselves would provide no discipline at all; only by handing oversight of the fiscal rules to a supranational body such as the European Commission could national compliance be assured.

Germany's vision of the future requires a clear transfer of sovereignty— although Berlin argues this is misleading since all member states are obliged to honour the Stability and Growth Pact. France would prefer to see fiscal discipline, including a debt brake, written into national constitutions—which is ironic since Mr. Sarkozy has conspicuously failed to get the French parliament to accept such a debt brake. In fact, the most worrying aspect of Mr. Sarkozy's speech was what it didn't say. Many in Brussels had been expecting the French president to set out his proposals to resolve the impasse. But the speech contained no detail, only news of a meeting with Ms. Merkel on Monday to discuss a way forward. Expectations for that meeting may be running too high. Given the distance between the two sides, it may be asking too much for them to agree a common position on the scope of treaty changes, or new protocols or pacts.

The question is whether the leaders can agree enough to unlock a major intervention by the European Central Bank. In what may prove to be an ultimately far more significant speech, ECB President Mario Draghi on Thursday signalled the central bank would be ready to consider a more radical range of unconventional measures, but only after euro-zone leaders had taken clear steps to guarantee fiscal discipline. What it would take to satisfy the ECB isn't clear. But what does seem certain is that if it isn't satisfied, it will throw the leaders back at the mercy of the markets—and wait for one of them to buckle.

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Jobless rise puts pressure on Sarkozy


In contrast to the resilience of neighbouring Germany, a sharp rise in unemployment has underscored the gloomy economic outlook in France as Nicolas Sarkozy gears up for his presidential re-election campaign. With joblessness now above 9 per cent and threatening to hit one in 10 workers, Mr Sarkozy will host an employment “summit” next month involving employers and trade unions in a bid to blunt the political threat he faces from the issue.

The number of jobseekers without any employment rose to a 12-year high of 2.85m in November, jumping by almost 30,000 in a single month and increasing for the seventh month in succession. These figures, released by the labour ministry this week, showed a further 1.4m people in part-time or partial work seeking full-time jobs. They followed estimates from Insee, the national statistics agency that the country slipped into recession in the current quarter and would return only to feeble growth in the second quarter of next year.

Latest indicators from Insee for the business climate in December also showed an overall decline, led by industry and services. A survey for Les Echos newspaper on Wednesday estimated a net 100,000 industrial jobs had been lost in France over the past three years. It is a very different picture to that of falling unemployment and rising business confidence across the Rhine and it has forced Mr Sarkozy to confront the issue, ahead of the presidential election in April. Xavier Bertrand, the labour minister in the centre-right government, said the jobs summit on January 18 would propose “solutions for rapid implementation” aimed at combating “to the maximum the effects of the crisis”.

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France's Jacques Chirac convicted of corruption


As French president, Jacques Chirac was called all sorts of names, not the least for his vociferous opposition to the U.S.-led war in Iraq. Now, he has a moniker that will stick: Convicted criminal. The avuncular 79-year-old on Thursday became France's first former leader to be convicted since Marshal Philippe Petain, who headed the Nazi collaborationist regime during World War II, in 1945. Chirac will not go to prison, but received a two-year suspended sentence for corruption linked to his 18-year term as the mayor of Paris. In a statement hours after the decision, Chirac said though he "categorically contest(ed)" the verdict, he would not appeal.

Despite the "pain and the profound sadness this verdict has inflicted," the statement said, "I sadly no longer have the necessary strength to lead before new judges the combat for the truth." He said that as mayor, "it is up to me and me alone to take responsibility," but stressed that "above all, I affirm with honour: I cannot be blamed for anything." "I leave (judgment) to my compatriots, who know who I am: an honest man who never had any other desire or motivation than the unity of the French people, the greatness of France, and action in favour of peace." The verdict was an uncomfortable coda to Chirac's four-decade career as a fixture of French politics, and could aid efforts by critics to rid the political system of its cushy cronyism. It also tarnishes the lofty image that French presidents often enjoy at home just as the country gears up for another presidential race.

Chirac was found guilty in two related cases involving 19 totally or partially fake jobs created for his benefit at the RPR party, which he led as Paris mayor from 1977 to 1995. He was convicted of embezzling public funds, abuse of trust, and illegal conflict of interest. Critics of the conservative Chirac — many on the political left — hailed the decision as measured and courageous, saying the court showed how political elites and average citizens were equal under the law. Anti-corruption crusaders, long frustrated by dirty dealings in the French political machine, rejoiced.
"I see it as a historic and very important decision for the future of French democracy," said Jerome Karsenti, a lawyer for the anti-corruption group Anticor, which had argued against Chirac as a civil party to the case.



        
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