June 12, 2013
The Cost of Living

          Despite how relatively inexpensive the cost of foodstuffs and other items seems to me, the cost of fuel is very high here.  Working out the math based on the latest figures available from the Economics section of Le Figaro of June 5,2013, the average price of a gallon of No. 95, the cheapest unleaded gas available in France, is $8.44; it is $3.66 in the United States.  During 2012, the average yearly fuel cost of the Renault Clio I am driving was 6,049 Euros, or $8,034, with the Euro at about $1.33 today.

          As a result, people use their cars less, on average driving 271 kilometers, or 168 miles less per year.  If consumers maintained the same rate of use for their vehicles, the increased cost would be 4.4% more, or twice the rate of inflation, which is 2%.  Insurance, tolls, and repairs have also increased faster than the rate of inflation, reports Didier Bollecker, the preseident of the French Automobile Club Association.  Efforts by drivers to reduce costs by buying diesel-fueled cars are no solution, as according to the study, the vehicles depreciate significantly after four years of use, in comparison to gasoline-fueled cars.

          To add to the bad news about the high cost of fuel, and the 12% decrease in foreign investment in France; the international Monetary Fund has just issued a report concluding that France's gambit of balancing its budget by raising taxes, is depressing the confidence of entrepreneurs in France's economy, as well as that of French households.  In order to be more attractive to investors, the report notes, France should liberalize the laws and regulations under which business has to operate in France.

          Those foreign businesses already established in France are the most critical, 34% projecting that in five years, business conditions will deteriorate still further; while only 9% of those considering, but not yet established in France, are of the same view.  Investments by BRIC companies in 2012 are almost half what they were in 2011: 14 in 2012, versus 23 in 2011.  Of foreign companies investing in Europe in the same year, only 6% of all emerging market investments in the 27-member European Union were sited in France. The number of favorable tax treatment clauses designed for use by businesses and individuals has been sharply reduced over the last five years, returning about 72 billion Euros to the government as a result.

          However, the disappearance of some of the benefits is unlikely to bring joy to the hearts of the French: Included in the package of loopholes eliminated, are tax breaks for families with three or more children, part of France's social policy of keeping the birth rate from declining.  Maintaining the birth rate, even increasing it, theoretically maintains the number of contributors to the social safety net, as well as the extended family and a sense of obligation to the older generation and its values.  For this reason, the elimination of special tax treatment for families with three or more children (which included early retirement for working mothers five years before mothers with two or fewer chldren), is highly unpopular among large families across a spectrum of socio-economic levels.

          The family still means a great deal in France, and right and left are both family-focused in their policies.  Freedom of the individual is not the premier value, as it is in the United States.   A Frenchman's expression of discontent with his government --as indicated by the frequency of strikes here-- is not driven by individuals connected by belief in particular deals of freedom opposed to state power, but belief in common ideals about what the paternalistic state ought to provide the social group consisting of farmers with its particular concerns;  railroad worker with theirs; and so on, nurses, teachers, civil servants.  There is no French Tea Party because those whose disaffections might attract them to the Tea Party's grass roots base identify their disaffections along socio-economic group lines, rather philosophically.  The Tea Party's central proposition --that, unchecked, government always keeps individuals from being able to decide what is best for them-- finds little resonance in France, where  paternalistic government is viewed as benign, so long as it remembers its children.