The real battle begins now

 

 

With the landslide victory of Nicholas Sarkozy in the French presidential election a thing of the past, the real task of implementing the promised reforms has started facing stiff resistance on the expected lines. Sarkozy’s endeavour to streamline the pension provisions of the country and to put an end to the lavish pension bestowed upon the public sector employees has been greeted with fierce opposition from the public sector employees, thereby literally bringing France to a near standstill. It's been mostly the employees from the transport and energy sector who have been spearheading the strikes. And though Sarkozy has agreed to hold talks with unions, his firmness and no compromise attitude is making many of the employees lose in this war of nerves.

France is still the sixth largest economy of the world with an estimated $2.2 trillion in GDP but is not expected to hold on to this position for long unless drastic steps are taken. It remains one of the most under reformed economies with a shocking public debt of 64.2% of its GDP, high income tax, an economic growth rate of just a shade over 2% per annum and a budget deficit of 3%. With India and China making growth of 8% plus a norm rather than the exception, it is only unleashing of a strong dosage of structural reforms that can save France from falling behind in the race. France’s economic malaise arises from the fact that for decades it has bestowed much largesse upon the working class. While the Rapidly Developing Economies like that of China and India are contemplating a 24 x 7 economy, it’s sooner rather than later that France needed to come out of its indulgence of a 35-hour or 4-days-a- week work culture and also reduce the massive public debt. Sarkozy’s pension reforms were a move in the same directions in which he proposed to increase the minimum number of years of service to 40 years from 37.5 years to avail the full benefits of pension. The pension reform is part of a series of structural reforms that Sarkozy has planned which also includes reforms in healthcare, industrial relations, year-end discounts, minimum wages and unemployment benefits. Talking to TSI Julien Levesque, Research Intern at IPCS said, "Reforms should continue, but they can be made more calibrated to increase acceptability and effectiveness."

While Sarkozy still enjoys grand support of the public at large, the coming days would be a real test of his mettle and prove whether he would be able to chart a new course for France...or not.