The French, who do things differently, believe that Friday the
13th is a lucky day. Key rings and other amulets often sport a 13,
sales of lottery tickets soar on that day — newspapers have
already published the happy information that there will be no less
than four of them this year. But Friday, January 13, brought a
nasty omen for President Nicolas Sarkozy. France, to his
considerable annoyance, saw its credit rating downgraded from AAA
to AA+ by Standard & Poor’s.
No matter that the U.S. showed last year there is life
after a ratings downgrade. Few Americans noticed, the Cardinals won
the World Series, and the holiday season rolled merrily on. Not in
France. The triple A was, Sarkozy’s minions had declared
repeatedly, a “national treasure” to be preserved at all costs.
That was the stated reason for two back-to-back austerity programs
— including raising the retirement age and paying higher value
added taxes on basic consumer items like food and beverages — to
reduce France’s budget deficit and cut its unsustainable national
debt. Those hurt, but it was the price the French had to pay to
keep that iconic rating, their president explained.
For Sarkozy personally, it was a badge of honor,
gilt-edged proof that he could successfully steer the good ship
France through Europe’s economic storm and deal as an
equal with Germany’s Chancellor Angela Merkel. In terms of sheer
politics, a downgrade risked being seen by voters in the April
presidential election as a thumbs down on his whole five-year term.
So much was at stake, he told his cabinet last summer, that “if we
lose our triple A, I’m dead.”
He lost it, and only 100 days before the ballot. Thus the
visible consternation at the Elysée Palace, with scrambling cabinet
ministers and advisors going into full damage control mode. Some
vented their anger at this American ratings agency that
was obviously playing anti-French politics. After all, another
rating agency, Fitch, had assured French authorities that it
wouldn’t touch the triple A in 2012. (It’s surely just a
coincidence that Fitch belongs to a French owner, Marc Ladreit de
Lacharrière.) “We should have hit them hard over their mistakes
during the subprime crisis two years ago,” clamored one. Sarkozy
himself appeared in denial, insisting at a press conference that
“it changes nothing.” Asked whether the downgrade was a sign
of failure that might reduce his influence in Europe, he testily
replied that he did not understand the question. “Ask me a question
I can understand,” he snarled.
Sarkozy’s opponents jumped on the downgrade as a godsend
and painted it as an unmitigated disaster. “It’s Sarkozy’s policies
that have been downgraded, not France itself,” said Socialist Party
candidate François Hollande. “It’s the first time since rating
agencies exist that France has been rated lower than Germany. We
don’t play in the first division anymore.” The right-wing National
Front candidate Marine Le Pen called it “the end of the myth of the
president who protects us,” adding “France is now on the same down
staircase as Italy and Greece.”
What no politician had the courage to say was that the
French are witnessing, in slow motion, the end of their
welfare state, known locally as the French Social Model. For the
last 30 years it has been sustained through political sleight of
hand and financed on credit. The French were assured they were
entitled to work only 35 hours a week, take five weeks vacation,
have single payer health care, pocket generous unemployment
benefits, and enjoy a cornucopia of handout programs. As a
result, they work on average six fewer weeks a year than the
Germans, fewer hours even than the laidback Greeks. Let the
good times roll was the implicit program of politicians both left
and right. Now the inevitable bill is coming due right at election
time. There’s no way Sarkozy can avoid paying the political
price.
(This column is excerpted from a longer piece that
will appear in the print edition of The American
Spectator.)
