jeudi 24 janvier 2013

France : a modern democracy on top of an everlasting monarchy

I understand that talking about Monarchy for France may seem weird. Where several European countries had chosen to keep their kings and queens (with very limited powers indeed), we're the ones who beheaded our king Louis 16th on Jan, 21st 1793. Still, the Monarchy System and what we call the Ancient Regime (the one which prevailed before the French Revolution) is still shaping large part of our political system, our national organization and also our work relationships. Nobility, gentry, aristocracy had shaped the way we interact at work, our companies hierarchy and also inter-companies interactions. We're working based on a "logic of honor" that was typical of this time rather than a "logic of contract" that prevails in US. That's why work relationships are sometimes so complicated when a US company manages a french subsidiary (or the opposite). I'll develop this in an upcoming post. In the current one, I'll talk about the political implication of the Ancient Regime everlasting effects and also about centralization. US had been built as a federation of states. France is quite the opposite and is desperately trying to mitigate the over-centralization of Paris where 1 out of 5 french citizen live. The result is odd : an obese headquarter surrounded by overgrowing multi-layers subdivisions.

An Hyper-President ?

Our former president, Nicolas Sarkozy, had been nicknamed as "hyper-president". Fact is that the French President has huge powers. It had not always been the case but it really is since the beginning of our 5th Republic (1958). You must keep in mind that, since the French Revolution (1789), we change the major version of constitution 19 times and we're at the V5 of the Republic. Our constitution is much more bigger than the US one but we also change it much more often.

People are elected a first chamber, the National Assembly. A second one (the Senate) is elected by local representatives, mostly mayors. The Senate is more stable and supposed to be more conservative (although it's now dominated by Socialist Party). Both chambers are voting the law. President is elected by the people in a two-round direct election. Every citizen is voting for a candidate among a dozen (that's the average number) then, two weeks after, for one of the two runner-up (best scores in first round). The President is then nominating a "Prime Minister" in charge of leading the country. The "Prime Minister" is then nominating the government with Ministers (20 in the current one like Army, Economy, ...) and "Sub-ministers" (18 currently). The Prime Minister must be confirmed by National Assembly. If the President is conservative but the National Assembly is leftist, then the President will be forced to nominate a leftist Prime Minister, what we're calling "cohabitation". It happened several times in the last 3 decades. But the President keeps a lot of powers : total control on armies, capability to provoke new National Assembly election (last used in 1997), the right to nominate people to some high positions in Administration, to veto some Ministers decision, ... The mandate duration for Presidency and National Assembly and election date had been aligned so that the cohabitation risk (cause of policy blockade) is now limited.

In the 4th Republic, the President was elected by the chambers, not by the people. He was weak (no direct people legitimacy) and unstable (26 presidents changes in 12 years) due to alliances swap. The 5th republic and the very strong role of the President is a reaction to the weakness of the 4th Republic. This instability led to 4th Republic Collapse in a very tough time (Algeria War which was an equivalent of Vietnam for France). The question is now : is this very "strong President regimen" still needed ?

How much the Presidence costs ? A lot !

The French President is living and working at the "Elyseum Palace", the equivalent of the US "White House" (unlike the 10, Downing Street in England which is a living place only for the Prime Minister ; in France, the Prime Minister has its own place : Matignon's Place. Fortunately, Paris is packed with palaces ...). French President has his "Camp Davis", a fortified place on the French Riviera.  It's interesting to see, as a symbol, how those administrations are living. Not that long ago (10 years), President, Ministers and part of their staff were paid by "secret funds" (bank notes !) in a total opacity. Ministers are now paid with an official wage in a fairly good transparency. Staff wages and benefits are still opaque. The French Presidency has a budget since ... 2008. Before this date, the money was just spent. No budget, no accounting. The official budget of presidency is 32 M€ but that must be completed with money coming from other ministers. Altogether, the budget is approximately 130 M€ ($175M/year). After the "bank notes payment" had been banned, the official wage of President had been raised from 7 k€/month to 19 k€/month (this sharp increase had been made by Sarkozy and was used by its opponent as a symbol of Sarkozy's preference for luxury - a dishonor in France !). That makes $300k a year (before income tax), less that IMF president for instance ($550k/year). Note that the new president, François Hollande, had decided to cut 30% of his salary (same for the Ministers).

Operational costs of French presidency (without staff salaries and travel) was $25M in 2011 compared to $13M at US's White House, same for German's chancellor and $18M for Queen of England. In 2011, the Presidency was owning 74 vehicles and 31 more were lent by french manufacturers. At German's chancellery, it's 27 vehicles only.  The cost per citizen of Presidency is 3.5 times more than in Germany. The staff of "Elyseum Palace" is 882 employees. It's 527 at the Germany's Chancellery and 582 in White House. This makes look French Presidency more like a monarchy rather than a modern democracy. Note that this is not the President'privilege only . The National Assembly President (4th ranked in France's protocol) budget is roughly $1.3M a year. In 2011, it spends $52k for wines (was $91k in 2008) and $82k for flowers ($137k in 2008).

Un-concentration : a fierce need to reform

France is too much centralized. Out of 65 millions citizen, more or less 12 millions are living in Paris suburban area. All political & medias powers are in Paris. A lot of economic power too. Always had been. It also was necessary because french borders were not "meant to be" : France had to be unified by a strong central power and a common language. Unlike the US, France shares the same very law everywhere upon its territory. It admits only very small variation in application. Only 5% of France's taxes and social charges are decided (and withheld) at local level ; only 25% of public spending are. Therefore, this leaves few room to local entities.

Nevertheless, efforts had been made since 1982 toward an "unconcentration" : more local taxes, more local spending and budget flexibility, a little bit more independence. French had been divided into "towns",  and the current split had been decided a little bit more than 2 centuries ago. There are 36.000 "towns" in France which means a town is 6 square miles and 1.800 citizens lives in. That's small. 50% of towns have less than 500 inhabitants while only 50 have more than 100,000. A US county mean population is 25,000. But France has another scale : the "departement", also created more than 2 centuries ago. We have approximately 100 of them for a mean population of 520,000 people (and a surface of 2,000 square miles). On top of that, "departements" are gathered into "regions" (22 of them in metropolitan area, plus some "special regions" for overseas). Some regions have a "cultural meaning" (Auvergne, for example, may be more or less connected with territory of tribes living 2,000 years ago), some others are pure administrative creation. All those lawyers have elected people (different elections on different periods), budgets and spending (department are for example handling school buildings for kids 12-15 years old, regions for kids 16 - 18 old). To be honest, very few people know exactly which entity does what.

The concept of "towns" is still functional in the countryside but not in medium/large cities. Since the split had been made 2 centuries ago, all cities have gone way beyond their borders. I live in a town (population 4,900) in the outskirts of Lyon (population 440,000), 10 miles away from the City Center. I couldn't make my way to the Center while finding a gap larger than 100 yards between houses (except parks) : this is now all the same city. So an "intertown" organization had been setup regrouping 58 towns for an overall population of 1,200,000 (second biggest one in France). Managers of this "intertown" are not elected (nominated by town mayors) but they are voting (small) taxes, they're spending money for resources sharing (garbage disposal, school buses, ...), they have staffs, they are paid. More than 15,000 of "intertown" organization had been created. This may had been a tremendous way to find synergies and save money. But staff of intertown organizations (most of local or national governmental organization staff members are entitled to "job warranty for life" - 5,000,000 people in France are under this status on overall 25,000,000 workers and 3,000,000 unemployed)  had sharply increased (+221% between 1998 and 2008) and town's ones never decreased ! So we're just piling up and there are more duplicates than savings.

A lot of people are now asking for a simplification : more transparency, the right to easily know who is responsible for what, taxes transparency. The main split had been made two centuries ago and going on piling up is not the good way when we're trying to find an equilibrium on our budget. But here's the trick : politicians are very often multi-mandate. A National Assembly representative or a Senator is most of the time also mayor and President or Vice-President of an "intertown" organization. Since 2012, Ministers are not allowed to keep local mandate but it was often the case before. So it would be hard for representatives to vote a law that would undermine their powers and financial resources : they're allowed to get a wage for each of their mandate up to a ceiling.  They're also benefiting various advantages for each mandate : car (with chauffeur), credit card, ... like barons in a Monarchy.

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