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.)