Joint meeting of the National Assembly and Senate
Versailles, June 22, 2009
(…) I wanted to come and tell you about the conclusions I draw from this crisis. I have already had the opportunity to talk about France’s European policy and what she wanted to do to regulate the globalized economy. Today, it is our country, the future it can build for itself I’ve come to talk to you about.
The crisis isn’t over. We don’t know when it will end.
We must do everything we can to bring it to an end as quickly as possible.
In the meantime, we must continue to support [economic] activity.
We must continue to guarantee the stability of our banking system.
We must protect our most vulnerable citizens, those who are suffering the most. And there is a great deal of suffering in our country.
We must do the utmost to prevent the victims of the crisis becoming an underclass we could no longer subsequently reintegrate into the economy and society. (…)
A crisis of such magnitude necessarily calls for a radical rethink. We can’t witness such a disaster without questioning the ideas, values and decisions which led to such an outcome.
By forcing us to re-examine everything, by shattering dogmas and certainties, the crisis makes us freer to conceive a different future.
Since the end of the Cold War, globalization seemed to compel everyone to believe there was only one path, one model, one approach. As the crisis has demonstrated that this path was a dead end, we now all find ourselves forced to find others.
As I said, a few days ago, to the International Labour Organization:
In the end, there are two kinds of globalization. The kind that fosters external growth, with everyone seeking, by all possible means, to take the jobs and markets of others.
And the kind which fosters internal growth, i.e. a development model in which each individual, by producing more and consuming more, contributes to the development of all.
The first kind of globalization takes the competitiveness-at-all-costs approach to the extreme by engaging in all forms of dumping and aggressive trade policies, crushing purchasing power and living standards.
The second is based on increasing productivity, raising living standards and improving wellbeing.
The first is antagonistic.
The second is cooperative.
The first pits economic progress against social progress.
The second, on the contrary, links them.
Today the whole challenge is for globalization to make the transition from the first kind of approach to the second. (…)
The model of domestic growth in which social progress and human progress go hand in hand with economic progress is the one which has always enabled France to score her finest successes.
Basing competitiveness not on sacrificial policies which erode living standards, but rather on the search for global productivity through the quality of our education system, health care, research, public services, social protections and infrastructures, through our quality of life and the mobilization of all our material and human resources, and the way private initiatives and public action have successfully complemented each other – this, basically, is what France has always sought to do.
It’s what best corresponds to her genius.
It’s what best corresponds to her ideal. (…)
Of course, for 30 years, French values have run counter to the ones dominating the global economy and global politics.
But who can’t see that the global crisis is once again creating favourable conditions for the French aspiration of placing the economy at the service of mankind, and not vice versa?
It all comes back to this: the economic crisis, environmental crisis and social crisis.
At the very moment when it’s again becoming obvious to everyone that economic development can be sustainable only if it respects mankind and respects nature.
At the very moment when the world is rediscovering the limits of an exclusively market-driven approach.
At the very moment when everyone has understood the necessity of regulating globalization and markets.
The French model once again has its opportunity.
Tomorrow’s growth model won’t be the same as the one during the 30-year boom which followed World War II. The environmental revolution and digital revolution will radically transform modes of consumption and, of course, modes of production. But the motivation will be similar.
Without even realizing it, we political leaders on both Right and Left have placed too much importance on financial capital, and no doubt too closely heeded the lessons of those who, while scandalized by public debt, were allowing runaway speculation fed by enormous leverage.
In the new growth model France so hopes to see, which she seeks to build, greater importance must be given to work, to entrepreneurs, inventors, creators – in short, to production. (…)
The crisis can’t lead only to casting blame on others. If ever there were a time to review our own actions, it is now.
Our future is being decided right now.
How can we confront our future if we aren’t certain of our values?
Where do we stand on the principle of equality?
Have we not gradually gone, without always realizing it, from Republican equality to egalitarianism?
The Republic means social advancement based on merit and talent. Egalitarianism means giving the same thing to everybody.
The Republic pulls everyone up. Egalitarianism levels everyone down.
Who can’t see that our model of integration is no longer working?
Instead of producing equality, it’s producing inequality.
Instead of producing cohesion, it’s producing resentment.
I don’t want to reopen the debate on the term “positive discrimination,” which I realize refers to histories and traditions which are different from our own. But I do want to say that to achieve equality we must be able to give more to those who have less; we must be able to compensate for the handicaps of those to whom life has given fewer opportunities for success than others. This must not be done on the basis of ethnic criteria. That would be at variance with our most fundamental principles. It must be done on the basis of social criteria. But it must be done. This will be the next government’s priority. (…)
Where do we stand on laïcité [secularism]?²
I won’t talk again about “positive laïcité” to avoid fuelling a pointless polemic. But I stand firm on the idea that laïcité isn’t a rejection of all religions, it isn’t a rejection of religious sentiment. Laïcité is a principle of neutrality, a principle of respect. Laïcité is respect for all opinions and all beliefs.
(…) We are not threatened by clericalism. We are more threatened by a form of intolerance stigmatizing any religious affiliation. I am thinking in particular of French citizens of Muslim faith. We must not fight the wrong battles. In the Republic, the Muslim religion must be respected as much as the other religions.
The issue of the burka is not a religious issue.
It is a question of women’s freedom, a question of women’s dignity.
The burka is not a religious symbol; it is a sign of subservience, a sign of humiliation.
I want to say solemnly that it will not be welcome on the soil of the French Republic. In our country we can’t accept women imprisoned behind a mesh window, cut off from all social life, deprived of any identity. That is not the French Republic’s idea of women’s dignity.
Parliament wanted to take on this issue. This is the best way to proceed. There must be a debate in which all points of view are expressed. Where else could they be better expressed than in Parliament? But I say we must not be ashamed of our values. We must not be afraid to defend them. (…)
FRENCH SOCIAL MODEL
How can we hope to give back our social model every chance of success if we can’t make difficult decisions?
These decisions, we all know what they are on: secondary schools [lycées], universities, vocational training, retirement pensions, dependency, public services, reorganization of our government departments and public services… and of course the deficits.
A lot has been done in the past two years: the RSA,³ autonomy for universities, the reform of the special retirement schemes [for specific categories of employees], minimum public services, the “judicial map” [location and jurisdiction of French courts] hospital reform, restructuring of our military bases, reduction in the number of civil servants, mergers of the ANPE [national employment agency] and UNEDIC [an agency in charge of benefit allocation], the merger of the tax and public accounting directorates and reform of trade union representation.
Those were tough decisions to take.
We took them.
And I’m not criticizing anyone for not taking them before.
I simply wonder why, yes why, it is so difficult to reform our country. Why it is so difficult to resolve the structural problems which, moreover, we are all perfectly familiar with?
The ANPE-UNEDIC merger should have been done 20 years ago. That of the public accounting and tax directorates, 10 years ago. And Michel Rocard’s White Paper on retirement pensions has been authoritative for 18 years.
How come, despite everyone’s efforts – and here I make no difference between Right and Left, that would be too simplistic –, how come we’ve achieved so few structural results when it comes to unemployment? How come so many people are left by the wayside? (…)
We tell ourselves that had the State played its role of giving a lead, being a force for progress, as has so often been the case in our history, had it been more on the side of the entrepreneurs, creators, inventors, France would have resolved a lot of her problems and the French would again be looking to the future with confidence.
In truth, France for a long time made a double bad choice.
We ought to have made management savings. We didn’t.
We ought to have focused a lot of resources on future-oriented expenditure. We didn’t.
I’m not blaming any specific political family, any specific government. It’s unquestionably a shared responsibility.
I’ve thought a lot about it.
I believe that, helped by the crisis, the time has come to challenge the principles of a policy which has locked us into increasingly unsustainable contradictions.
I won’t shirk my responsibilities in the face of the serious issue of our public finance deficits.
But I won’t conduct an austerity policy because austerity policies have always failed. I won’t raise taxes because a tax hike would delay for a long time the ending of the crisis and because if you raise taxes when they are at the level they are today, you won’t reduce the deficits, you will increase them.
I won’t sacrifice investment because without investment there’s no longer any future. Because the policy of indiscriminately rationing expenditure is one which leads to not making choices and, at the end of the day, doesn’t allow you to control spending. This policy has too often led to cuts in good spending while at the same time letting the bad spending run away.
Whenever we’ve had an austerity policy we’ve ended up with less growth, more taxes, higher deficits and more spending.
Yes, we have a public finances problem.
Yes, we have a deficit problem.
But we won’t resolve it that way.
We must, it seems to me, radically change the way we view the problem.
There’s the bad deficit. The one which finances the bad spending, the waste, the excessive red tape and overly high operating costs. This structural deficit has to be reduced to zero through the courageous reforms to which we will give priority in the next government’s programme.
There’s a second deficit, the deficit attributable to the crisis, the reduction in revenue, and increase in welfare spending. This is a social buffer. It has worked well. It has allowed France to limit the effects of the crisis. After the crisis it will be necessary to absorb the deficit attributable to the crisis by devoting to it all the revenue resulting from the growth.
Finally, there is the deficit which finances the future-oriented spending. It isn’t abnormal to finance investment through borrowing. It can be a good deficit on the express condition that it allows the financing of good investment.
So the key issue is the quality of the public spending. The austerity approach masks this because it prompts people to think only of the short-term budgetary consequences of decisions they take. (…)
I want to tell those expressing surprise at our being able to incur debt to provide money for the French strategic investment fund that this fund is helping create jobs, maintain technological advances and, what’s more, will replenish the State coffers because the assets it is buying are going to rise in value.
It’s an investment. The choice of not doing it, which would cost less today, would cost us infinitely more tomorrow.
I want to tell those who thought the Grenelle Environnement cost too much that it’s the most profitable expenditure imaginable. It’s going to create 600,000 jobs. It’s going to give France a substantial advance in what is destined to be at the heart of the new world growth model.
Our public finances will do all the better as a result. It’s an investment.
When I commit myself to the Greater Paris project, to post-Kyoto France, which will be the testing ground for Grenelle, the global showcase for know-how and French technology, it’s an investment.
We will mobilize new resources for the employment areas in difficulty. I say that this is better than subsidizing inactivity by condemning the unemployed to handouts. Reindustrialization is an investment.
I would like us to offer a solution to all adolescents leaving school at 16 with nothing. This will make us spend more today, but enable us to spend a lot less in the future because these young people will then be capable of finding jobs, founding families and bringing up their children rather than remaining marginalized. I say this is an absolutely essential investment for French society.
I want the State to fund, in special boarding schools encouraging excellence, the education of bright children from modest backgrounds who are keen to study, providing them with good living and working conditions. It’s better for our public finances to make the most of all the best minds, all the talents rather than lose some of them. The waste of good minds and talents is the worst type of waste for a country.
I am keen to see better conditions in secondary schools because pupils who are happy, considerate, responsible and aware of their responsibilities will make better students and so better citizens. So the secondary school reform will be one of the best investments we can make for the future.
Reasserting the value of apprenticeships, vocational training, and training in technology and the arts. I want us to devote the necessary resources to make them areas in which we excel, as we do in the sciences, with ways of moving from one course to another and high-level diplomas. I maintain this is good spending and what is costing us dear is the fact that we have delayed it.
We have to go on giving universities greater autonomy. We have to invest in university campuses to bring our universities up to an international standard. We have to invest in student accommodation. I want us to provide the funds to enable the young in our country to achieve their autonomy through their work, their merits. This way we will prepare for tomorrow’s growth. (…)
REGIONAL AND LOCAL GOVERNMENT REFORM
We shall complete the reform of the “administrative map” [regional and local authorities] because the benefit of having public services close to hand can’t justify the loss of our resources
CIVIL SERVICE REFORM
We won’t go back on the rule of not replacing one out of every two civil servants on their retirement. Not for ideological reasons, but because on this depends the efficiency of our administration and improvement of our civil servants’ living conditions and careers.
We will go further in controlling health expenditure, because I’m perfectly aware of the massive financial needs, and that here we haven’t got the right to let a single euro be wasted. (…)
We will deliver the pensions reform.
2010 will be a crucial year. Everything will have to be on the table: retirement age, length of contribution period and, of course, physical arduousness.
All options will be considered. (…)
We won’t let one euro of public money be wasted. I’m asking Parliament to mobilize to identify all the unnecessary instruments, all the subsidies of unproven efficacy, all the bodies which serve no purpose. Take the time to debate this with the government in the autumn so that strong decisions can be taken before the end of the year. (…)
We can no longer set priorities and not release the financial resources needed to achieve them.
This is a matter of public statement credibility.
This crisis must be for us the opportunity to get our investment which has lagged behind back on track and even ahead. There are a lot of very important areas for our future. Town and country planning [regional development], future of rural areas, education, vocational training, research, health, innovation and so on, which are going to require substantial resources. We won’t be able to satisfy them in the strict framework of the annual budget. If we don’t change our practices, we will go on declaiming our priorities without being able to achieve them.
On Wednesday, the Prime Minister and I will be carrying out a government reshuffle.
The government’s first task will be to think about our national priorities and putting a loan in place to finance them.
We’ve absolutely no intention of setting these national priorities alone.
These national priorities, in the key sectors for France’s future, concern the whole country.
Parliament must be involved in defining them.
Management and unions will be involved too. We’ll be talking to them about this as of 1 July. Business leaders and players in the worlds of the arts, research and education will also be consulted.
We’ll discuss this together over three months.
Which are the handful of key strategic, priority sectors for France’s future once the crisis is over?
Decisions will be taken only on completion of this discussion.
What I’m calling for is a revolution in our way of thinking, a radical change in the way we approach the future.
As for the loan, its volume and details will be decided once we’ve set the priorities together. We’ll raise this either from the French or on the financial markets. I’ll take the necessary steps to ensure the loan is allocated exclusively to these strategic priorities for the future. And I mean “exclusively” because I intend at the same time to take a sledgehammer to any of our operating expenditure proving needless or non-priority.
Our future is going to depend on investment. Our future is going to depend on the importance we attach to production and labour in our new growth model. (…)
I say to our friends, to our European partners: France is changing. But I say to them: Europe must change too. Europe won’t be able to continue operating post-crisis as it did before. This isn’t the time to talk about France’s European project, but Europe must give itself the means to play a part in transforming the world. Europe and France must change together.
As you will have understood, I’m proposing that we get moving.
Let’s have the courage to change. (…)./.
¹ Joint meeting of the National Assembly and Senate.
² Laïcité goes beyond the concept of secularism, embracing the strict neutrality of the State.
³ revenu de solidarité active – inclusion income support comparable to the US EITC (earned income tax credit) and the British WFTC (working families’ tax credit).