François Hollande, courtesy of MD Photography
PARIS – France is gravely ill. So ill, in fact, that Standard & Poor’s recently cut its sovereign-credit rating – the country’s second downgrade in less than two years. The decision was accompanied by warnings that the budgetary and structural reforms that President François Hollande’s administration has implemented over the last year have been inadequate to improve France’s medium-term growth prospects. Now, the pressure is on for structural reforms covering everything from labor markets to taxation.
While the S&P downgrade was unexpected, it was not exactly shocking. The recent downturn in France’s industrial output has created large trade deficits, and is undermining the competitiveness of small and medium-size enterprises. Unemployment stands at about 11%, with a record-high 3.3 million workers registered as jobless in October. » More
World economy cracked beyond repair? Photo: Jack Keene/flickr
As Asian economies keep posting positive growth numbers with the momentum for a full recovery shifting irreversibly to the East, and as banker’s bonuses and Wall Street profits return to pre-2007 days, the temptation to look away from the root causes of the global financial crisis is as great as ever. But has the chance to learn a valuable lesson really just been lost in the face of a fragile recovery?
Some resources from our Digital Library to help you answer this key question:
Marching for work and retirement, photo: marcovdz/flickr
Europeans are talking about retirement. Yet, in France at least, it’s the youth who are most angry. Today the biggest protest movement since President Sarkozy took office continued for a tenth day. Airports have been disrupted, health risks have reached ‘pre-epidemic levels’ with refuse collectors on strike, even the Louvre was closed as staff blockaded the museum entrance.
The cynical readers among you will view this tête-à-tête as more déjà vu than coup d’état. Nonetheless, there remains a fundamental question in the developed world over how to balance the right to a ‘long and happy retirement’ against the gerontological and economic realities of modern times.
In financial terms it’s hard to argue with the figures. According to Allianz, a leading German financial services company, public pension expenditure for the European Union as a whole will increase to 12.8 percent by 2050. Compare this with France, Greece, or even Italy – where expenditure will increase to 25 percent of GDP by 2050 – and it seems inevitable that the budgetary axe should fall at this time of fiscal ‘belt-tightening’ across the continent. In Britain, for instance, the new measures are projected to save £5 billion a year. Furthermore the financial crisis has hit one rather traditional quirk of European retirement rights, namely that of a gender-based pension entitlement, with both the UK and Greece removing a woman’s prerogative to beat her husband to the pension pot.
However, this is one problem we can’t blame on the bankers. Aging populations are a direct result of our successful economic development – as the social, technological and cultural effects of modernization and urbanization mean lives are lengthened and people have fewer children to keep their populations youthful. As the New York Times put it in response to the protests, “it is hard to conjure a situation in which people move back to the countryside and again have larger families.” In fact, the Oxford Institute of Ageing – which published the seminal 2008 Global Ageing Survey – predicts that the West’s future search for a younger workforce will be instrumental at improving lives in the developing world, where in Africa only five percent are projected to be 65 or older in 2050 – compared to 29 percent in Europe.