French President Francois Hollande delivers a speech as he inaugurates the Mucem (Museum of Civilisations from Europe and the Mediterranean) in Marseille, southern France on Tuesday. (GERARD JULIEN/AFP/Getty Images)
Lately, high-placed French officials have sent nasty notes to President Francois Hollande, criticizing how he is handling the flailing French economy.
France is in a double-dip recession. The bread-basket of Europe is being downgraded left and right by ratings agencies and high unemployment remains a constant problem.
Edouard Carmignac, founder of France’s largest independent asset manager, fired off an open letter to Hollande in April, warning “time is running out” for France, according to CNBC.
The economy lacks competitiveness and public spending accounts for 57 per cent of GDP but only 90 per cent is covered by tax receipts, Carmignac wrote, adding that not cutting the public sector is “suicidal.”
The French nanny state is one of the most generous in Europe with exceptional maternity benefits, low-cost child care and an exceedingly large and well paid civil service.
Then there’s the missive from Christian Noyer, the governor of the Banque de France, or, the French Central Bank.
This one is my favourite.
Sent on May 27, Noyer chastised Hollande for high labour costs, flagging competitiveness, a low retirement age and he recommended slashing civil service jobs, according to French author Gaspard Koenig, writing for the U.K.'s Centre for Policy Studies.
As Koenig points out, “for once, a senior figure of the French Republic has raised the alarm on the unsustainable weight of the state in the French economy.”
But here is the kicker -- the French Central Bank employs 13,000 people at a cost of 1.5 billion euros each year, Koenig notes, adding only 6 per cent of the staff is under 30 and 32 per cent are older than 55.
By contrast, the Bank of England employs 1,955 people with a staff cost of 155 million euros. Not that the British economy is a shining example of wealth and efficiency and should be casting stones from a glass house, but, I digress.
So … what exactly are those French central bankers doing and how much are they making to do it?
Apparently, this situation is not their fault. It is French law. Koenig says there is a 1946 statute that practically makes it illegal to fire a member of the French civil service. A special act of parliament is needed.
Plus ça change, plus c'est la même chose.
Tanya Talaga is the Star's global economics reporter. Follow her on Twitter @tanyatalaga