September 7, 2003
Europe shows us the right wayPosted in · 1 comment ·
Pierre and Claudine have just come back from their annual four-week sojourn in the south of France, refreshed, tanned and ready for their 35-hour week at Airbus. Chuck and Barbara, Boeing workers in Seattle, are feeling the strain. They haven’t taken a holiday for two years apart from a few snatched weekends in the Rockies. When Pierre and Claudine were basking on the Med, Chuck and Barbara were working overtime to set cash aside for young Billy’s school fees.
When he’s not working more than 60 hours a week, Chuck spends at least three nights in the gym trying to work off the encroaching middle-age spread.
Although he has been watching his weight since his early 30s, he can’t seem to beat the mid-40s flab. Pierre, on the other hand, is a walking example of the French paradox.
He never misses his three-course lunch with wine, gorges on smelly Roquefort and hasn’t broken sweat (at least publicly) since he was a boy, yet there’s more meat on a seagull.
Claudine can be slightly neurotic about little Jean-Yves (and probably as a result of wearing sailor-suits at a young age there is a good chance that he’ll turn out to be a bit of a prat), but at least all the bills are paid by the state.
Barbara, in contrast, constantly worries about Billy – whether he’s doing drugs, getting caught on the wrong side of town in a drive-by or simply falling into bad company.This is why they’ve sent him to the best school in the neighbourhood, even though the fees are exorbitant.
Claudine goes to work on a spanking new metro that runs on time and is heavily subsidised. Barbara finds it hard to get out of her footpath-free estate onto the main highway, as the junction is gridlocked from 7am. Although both petrol and insurance are cheap, it takes her 50 stressful minutes to travel five miles.
Pierre and Chuck do more or less the same jobs in more or less similar companies. Chuck earns 30 per cent more than Pierre – but Pierre works half the hours, and as such is more productive.
In fact, the difference between the two men is mirrored across the board between the two countries. Income per head in the US is about 20 per cent more than in France, but on average the French work 20 per cent less.Thus in economic terms the difference between the two countries amounts to a three-course lunch every day and six weeks holidays.
Pierre speaks English fluently and sometimes spends time in Airbus’s British office. Having spent most of the day being patronised by Ricky Gervais-style middle managers in Slough, he muses on the difference between the continental approach and the Anglo-A mer ican one as he catches the Eurostar home.
On the English side everything is haphazard and shoddy. Once in France, everything is pristine and efficient.
In England, the fancy French train snails through the Kent countryside at around 50 miles per hour, shuddering periodically on second-rate privatised infrastructure (supplied by the now bankrupt Railtrack).
On the French side it rapidly hits its maximum speed of around 200 kilometres per hour without as much as a ripple on your coffee. In no time it glides into Gare du Nord, where any number of metro connections deliver you to your final destination.
Cast your mind back to when the Channel Tunnel was being built in the late 1980s and you would be forgiven for suggesting that the opposite should have been the case. At the time, it appeared a safe bet that the British side would work smoothly and chaos would reign over in Normandy.
The British agonised publicly over plans, and ideology dominated arguments about how best to finance the project. Ultimately, the private sector forked out. According to the British press, this open procedure would ensure best practice.
In France, the state didn’t bother itself with such trivia as cost.The tunnel was a great project for France, and it would be built using the best French technology with no expense spared. For the French, this was all about vision and national pride, and, as a consequence, it was far too important to be left to bean-counters, shareholders or irate residents’ committees.
It has ever been thus.The continental/French approach is to conceive the big vision and worry about the details later. In contrast, the British start with the detail, and, by allowing themselves to get bogged down in the minutiae, sometimes missing out on the big picture altogether.
In recent days, when I hear the Minister for Transport talking about public-private partnerships to finance
the Metro and talking heads on the radio and television telling me how banjaxed the French and continentals are, it is hard to square reality with the rhetoric.
Why does the business press have such a jaundiced view of continental society?
Typical headlines in the business press refer to the `lack of reform’ on the continent or the `delinquency of the French economy’. Yet a cursory glance at the figures indicates that the difference between the high-tax EU and low tax US is not so great.
Over the past three years the US economy has grown by 5.9 per cent – just 1 per cent more than that of the EU. This is not particularly impressive. Since 1995, living standards have risen by 16.1 per cent in the US but by 18.3 per cent in the EU.The US economy has grown by an average of 3.2 per cent in the period 1995 to 2002 versus the EU figure of 2.3 per cent.
However, as the US population has increased by 10 per cent in the past six years and Europe’s has hardly grown, the average European has seen his income grow more than the average American. American-lovers point to the productivity of the Americans, which has grown by 1.9 per cent over the past seven years, but this figure is beaten by seven European countries: Ireland, Austria, Finland, Greece, Germany, Norway and Belgium.
And while the output per worker is higher in the US, that is because they work much longer hours.
Ireland apart, the six other European countries that are more productivethan the US all havehigh taxes. Britain, the country that more than most champions low taxes, languishes ninth in the European league of productive countries.
There comes a time when cutting taxes for its own sake becomes selfdefeating, and it would appear that Ireland is close to that point. Ireland needs enormous investment in infrastructure and without tax increases it is hard to see how we are going to pay for these projects.
Inthe years ahead, Ireland will have to make a choice about our society, ourlifestyles and ourbottom line. Don’t be surprised if we elect to move closer to Berlin than either Birmingham or Boston.