FRANCE SABOTAGE OF THE SNCF NETWORK

THE MODE OF ACTION OF THE ULTRALEFT

ACCORDING TO MINISTER G. DARMANIN

“The traditional mode of action of the ultra-left”

The resigning Minister of the Interior stressed that these “sabotages were voluntary, very precise and extremely well targeted”.

“This is the traditional mode of action of the ultra-left,” he added. Asked about the proximity of the "identified profiles" to the ultra-left, he replied: "We must be careful (...), the question is whether they were manipulated or whether they were acting on their own behalf." . “These are people who can approach this movement,” he clarified.

A suspect was arrested on Sunday at an SNCF site, near Rouen, in Oissel in Seine-Maritime. This arrest occurred three days after the multiple sabotages which targeted the TGV Atlantique, Nord and Est lines. It is still too early to determine whether this man is involved or not.

The suspect, a 28-year-old ultra-left activist, had cutting pliers, a set of universal keys, as well as access keys to SNCF technical premises in his vehicle. The gendarmes also found Romain Huët's book "The vertigo of the riot: from the Zad to the Yellow Vests".

The suspect was placed in police custody for "penetrating or circulating in an outbuilding on the railway line prohibited to the public" and "criminal conspiracy", said the Rouen public prosecutor's office. He is originally from the Toulouse region and has been in police custody in Rouen since his arrest.

Asked about the message of support for this sabotage received by several media on Saturday, Gérald Darmanin felt that it resembled a demand. “You have to be careful because this can be a claim of opportunity.”

Who blames the SNCF network ?

Acts of sabotage were committed around 4 a.m. Friday morning on the TGV Atlantique, Nord and Est lines, affecting 800,000 travelers by paralyzing the trains. The places were not chosen at random. The significant damage was committed simultaneously. “Targeted and coordinated sabotage,” assured Gabriel Attal, resigning Prime Minister, from the crisis unit of the Ministry of Transport.

The vandals targeted duct passages containing numerous wires controlling train signaling, switch motors and fiber optics.

The authors seem to know the SNCF network well, having acted in key locations for the TGV lines.

The most serious consequences are in the West of France, where the damage was committed in Courtalain (Eure-et-Loir), near the TGV junction towards Brittany or the South-West.

In Croisilles in Pas-de-Calais, the TGV Nord was targeted, affecting the region crossed by the Eurostar to the United Kingdom and the Thalys to Belgium.

Another targeted location is Pagny-sur-Moselle in Meurthe-et-Moselle, west of Metz and Nancy, where the TGV Est runs. The vandals had also planned to target the TGV Sud-Est by committing damage in Verginy in Yonne but railway workers were alerted and were able to put them to flight in time.

Asked whether there had been a "failure" in the intelligence services, Minister Gerard Darmanin replied that the country had organized the biggest event in the world, the opening ceremony of the Olympic Games, without incident.

CHOOSE FRANCE MIRACLE OR MIRAGE?

A REINDUSTRIALIZATION AT HALF

The Presidency of the Republic announced 56 new investment projects for a total amount of 15 billion euros - compared to 13 billion in 2023. This is a "record", trumpeted the Elysée during a meeting with journalists. These announcements could create 10,000 jobs, according to the Elysée.

A harvest of investments... 15 billion euros

This is one of the flagship events of the Élysée strategy to attract foreign investment in order to “support growth, innovation and employment”. The fruit of a tax and energy policy, in particular.

As the European elections approach, the government is seeking to take advantage of this period to regain ground in the polls against the National Rally (RN). With GDP growth in the first quarter exceeding expectations (+0.2%), Emmanuel Macron aims to improve his image after the turbulence linked to public deficits in the spring.

However, despite this wave of investments, industrial production in volume remains 5% lower than its level before the health crisis, and productivity is still stagnating. The question therefore arises: is the reindustrialization advocated by the government really underway?

Among the 56 announcements made, 7 projects relate to the field of quantum and artificial intelligence, 11 to decarbonization, 10 to the transport sector, 9 to health and 10 to the financial sector. Nine of these projects concern regular investments by companies already present in France. Companies such as Microsoft, McCain, Amazon, FertigHy, Skeleton (an Estonian battery factory) and others are planning to test their luck on French soil.

44% of this total was committed by American companies (including Microsoft, Amazon and Pfizer), 36% by European companies, compared to only 3.9% for China - including the New Silk Roads sovereign fund. A reversal of dynamics compared to 2023 when American investments represented only 3.93% of the total announced, compared to 52.6% for Asian companies. Geopolitics was also involved...

...for a trompe l'oeil attractiveness

A very low number of jobs per billion

A Business France study dating from 2022 showed that only 3% of foreign investment projects exceeded 250 employees in France. And two-thirds of projects had 20 or fewer.

However, despite the title of European champion in terms of foreign investment attractiveness attributed to France by the latest EY barometer published at the beginning of May, there is a decline in terms of job creation:

on average, only 35 jobs are generated per investment project in France, compared to 49 in Germany, 61 in the United Kingdom and even 299 in Spain.

This trend is partly explained by the high cost of labor in France and the shortage of qualified labor, particularly in the field of industrial projects, as Sylvain Bersinger, economist at Asteres, points out.

Due to these cost and labor challenges, France is attracting more investors for projects focused on cutting-edge technology, while industrial projects lead to a significant drop in job creation.

Is France really attractive for employment? When analyzing the number of jobs created in relation to the total population, France ranks only eighth in Europe, behind countries such as Portugal, Serbia, Ireland, Hungary, Spain, the United Kingdom and Greece.

How to explain it? In addition to our legendary labor costs, “France is a country of service professions and suffers from a lack of qualified labor for industrial projects,” points out Sylvain Bersinger, economist at the Asteres firm. France itself moreover invests more abroad (45 billion) than the reverse (34 billion).

As a result of all these factors, foreign investments account for only 0.13% of employment in France, says EY. A drop in the ocean, Choose France does not solve the problem of unemployment. By building cutting-edge products at home, we may gain geopolitical independence, particularly from countries like China...and at the margins.

“Failing to sell enough, France sells itself to others”

The economist Jean-Marc Daniel interviewed by L'Express is also worried.

“What France suffers from is not too low an attractiveness, pointed out the president of the Society of Political Economy. It suffers from an excessive demand which, not finding a sufficient national supply in comparison, is concerns imports. As a result, France accumulates external deficits, the consequence of which is a transfer of financial resources to its suppliers, and more generally to the rest of the world.

As it cannot sell enough to cover the cost of its imports, it sells itself, its commercial partners using the proceeds of their sales made on its territory to buy its heritage." "Failing to sell enough, France sells itself to others", he was already worried after the announcement of colossal investments by Qatar in the French economy – 10 billion euros by 2030.

The spectacular increase in an indicator, net foreign assets, in other words the difference between the value of what the French hold abroad and that of what foreigners hold in France, corroborates this analysis. From -40 billion euros in 2001, this figure plummeted to -630 billion in 2022.

Our leaders “must focus their policy not on the appeal to foreign capital but on more rigor in the management of public finances, the deficit of which artificially maintains demand and absorbs savings which are lacking in productive investment”.

TWO BILLION EUROS FOR SUDAN

FREAKING A SERIOUS HUMANITARIAN CRISIS

“In total, we can announce that more than 2 billion euros will be mobilized,” declared French President Emmanuel Macron. He said that before Monday's meeting, only 190 million pledges had been recorded.

Of the 2 billion, the member countries of the European Union will contribute 900 million euros, including 110 million by France. Switzerland has made 19 million francs available for Sudan for 2024.

The conference ended with a joint declaration calling on “all foreign actors” to stop providing armed support to the belligerents in Sudan.

A bloody civil war

It has been a year since Sudan has been gripped by a bloody civil war between the Sudanese army and the Rapid Support Forces, a paramilitary group. The fighting has caused tens of thousands of casualties and some six million people have been displaced, the majority of them within the country. Sudan has thus become one of the largest humanitarian crises in the world. A year after the start of the war, one in two Sudanese needs humanitarian aid.

Deadly clashes broke out on Saturday April 15, 2023 in Sudan between the Sudanese Armed Forces led by General Abdel Fattah al-Burhan, and the Rapid Support Forces, a paramilitary militia led by General Hemetti.

“For Eid, our country bleeds: destruction, desolation and the sound of bullets have taken precedence over joy,” General Burhane declared to the 45 million Sudanese.

This violence is not a surprise. It is the culmination of several months of tension between the two groups and especially their two leaders. At the origin of this situation, a power struggle between the two most powerful generals in Sudan. On one side, the head of the army, Abdel Fattah al-Burhan, who de facto rules the country. On the other, his number two, General Mohamed Hamdane Daglo, nicknamed “Hemetti”, at the head of the Rapid Support Forces (RSF, in English), a powerful paramilitary force.

To understand this rivalry, we have to go back to April 11, 2019. That day, the dictator Omar al-Bashir was overthrown by a military coup. Al Burhan and his junta take power. Hemetti is number two in the regime. Sudan is moving towards a transfer of power to civilians, but in October 2021, the military staged another putsch. Al Burhan and Hemetti are maneuvering to defeat the democratic transition.

How did we get here ?

In October 2021, the two generals therefore united to oust the civilians with whom they had shared power since the fall of dictator Omar al-Bashir in 2019.

“A marriage of convenience” for the putsch, explains researcher Hamid Khalafallah. “They never had a sincere partnership but shared interests vis-à-vis civilians.”

And the breaches in the sacred union quickly came to light: The head of the Rapid Support Forces (FSR), Hemedti, has several times denounced the “failure” of a putsch which reinstated “the old regime” of Bashir, according to him. Then the conflict intensified when it was necessary to sign the conditions for integrating his men into the regular troops, as part of the agreement with the civilians which was to relaunch the democratic transition.

For experts, this agreement opened Pandora's box: by letting the military negotiate among themselves, "Hemedti went from being second to Burhan's equal," says Kholood Khair, who founded the Confluence research center. Advisory in Khartoum. Feeling "more autonomous in the face of the army", Hemedti saw an opportunity to realize "his very great political ambitions", adds Alan Boswell, in charge of the Horn of Africa at the International Crisis Group.

The thorny question remained to be resolved: how to integrate Hemetti's Rapid Support Forces into the regular army. And then who will control the soldiers? Who to control weapons?

Another bone of contention, the presence since the reign of Omar el-Bashir of numerous Islamist officers in the Sudanese army, whom General Hemedti wanted to purge. Since the coup d'état of October 2021, the Islamist movement, which already benefited from significant support within the army, has strengthened with the blessing of General al-Burhan. This was one of the main points of tension with General Hemedti.

The two generals have opposing positions.

The army wanted very rapid integration, within one or two years. General Al-Burhan, supported by Egypt, and under pressure from certain Islamist executives in the army, made the signing of the agreement conditional on the integration of the RSF into the ranks of the army, under his command.

The RSF wanted to maintain autonomy for up to ten years. Hemetti categorically refused to let his rival command his men and agreed to place his forces only under the authority of a civilian head of state, and on condition that the army was purged of its Islamist elements. This security reform, a central issue in the transfer of power to civilians, has therefore ignited the powder.

Ancient rivalry of economic power

But the rivalry between the two men is older. For years, General Hemetti's Rapid Support Forces have continued to grow in strength. Made up of 80 to 120,000 men, well equipped, well trained, this force in the form of a free electron, which did not respond to central power, aroused discontent in the general staff of the regular army. With the sending of mercenaries to Yemen and the financial windfall from gold smuggling on behalf of the United Arab Emirates, Hemetti also became one of the richest and most powerful men in the country.

The rivalry between Al-Burhan and Hemetti is also personal. The two officers know each other well, they both operated in Darfur during the civil war in the 2000s and then during the Yemen war. And they have been competing for several years to reclaim a number of resource networks since the 2019 revolution.

All this only made things worse over the months. With an acceleration during political negotiations. Each camp recruited massively, particularly among the youth of Darfur, the large western region. And clashes could break out.

A year after the start of the war, one in two Sudanese needs humanitarian aid. Sudan has thus become one of the largest humanitarian crises in the world.

UNDERSTANDING THE ANGER OF FRENCH FARMERS

Faced with their growing unease, farmers decided to make themselves heard. On trailers and in livestock trucks, tanks, modular construction, generators and tents, farmers plan to set up camp and occupy certain highways in France

“Do we still want to eat French?”, “farmers = realistic, administration = utopian”, or even: “Our end will be your hunger”.

The complaints are pouring in.

“With the increase in costs, cash flow is increasingly tight and even if prices have increased, we are far from the target.”

“Unfair competition with imported products”, “stifling standards”, “colleagues who did not receive CAP aid on time”:

The drivers are all ages, but the same fed up.

Our demands ?

Stop the excess of standards, and let's release income on our farms to allow young people to settle down and replace the 45% of farmers who will retire by 2030, summarizes Yannis Baltzer, president of the JA du Bas-Rhin.

Note that debt and loss of competitiveness pushes, every day, a farmer to end his life...

An alarming observation which crystallizes the agricultural situation and which endangers our food sovereignty.

The French agricultural model under European supervision

The decline in agricultural employment, the expansion of farms, motorization and the use of fertilizers and phytosanitary products characterize the major transformations of French agriculture since the 1950s. At the end of the war and in order to ensure the develop agricultural production, French agriculture thus came under the supervision of Europe thanks to the creation of the CAP, Common Agricultural Policy in 1962.

To stimulate agriculture, 3 tools were created: import taxes, guaranteed prices for farmers and export refunds. The subsidies allocated by the CAP are distributed according to the following model: 70% of the subsidies are called "direct", in other words farmers receive "a basic income", calculated according to the operating area, regardless of the way in which production is carried out.

The rest of the subsidies, co-financed by the member states, relate to rural development, that is to say additional support which aims to support farmers who implement environmentally friendly practices, who launch their activity or who suffer from a competitive disadvantage due to their geographical area.

Fewer and fewer farmers, who are increasingly older

By encouraging farmers to expand and gain competitiveness, it is natural that over the past 60 years, French agriculture has lost 80% of its farms and more than five million agricultural jobs. Today, French agricultural policy is therefore based on productivity thanks to the growing increase in large farms.

And for good reason, in 2010, very large farms represented 33% of French farms compared to 67% in 2016. According to the 2020 agricultural census, there are around 389,800 farms in mainland France. That's 100,000 fewer than 10 years ago. On average, they extend over 14 additional hectares than in 2010.

The proportion of operating farmers in France has declined sharply. If they represented 7.1% of total employment in 1982, they only accounted for 1.5% in 2019, or 400,000 people.

They are considerably older than all employed people: 55% of them are 50 years old or over, compared to 31% for the rest of workers. Only 1% of them are under 25 years old. They also report a weekly working time well above that of all employed people: 55 hours per week on average, compared to 37 hours for the second group.

Agriculture has always been an important sector even if it tends to decrease over the years, to represent 1.6% of the national GDP. At the European level, France is still the leading agricultural producer with a turnover of 70.7 billion euros in 2016, the second after Germany for the agri-food industry with 370 billion euros.

A podium which risks being turned upside down by ever fiercer competitiveness and the arrival of other countries in the Union. The new free trade agreements [agreements between Canada and Europe, New Zealand, Morocco or Argentina] are further crushing farmers

Increased competition from our European neighbors has greatly weakened the French agricultural situation.

Agriculture today is no longer the same as yesterday. The peasant world, which has become a minority, even marginal, in France, sees its model completely disrupted. Increasing competition from our European neighbors has considerably weakened the French agricultural situation.

Rightly so, an INSEE study since the 2000s reveals that the share of food imports has doubled, increasing the share of foreign dishes on the plate of a French citizen to 20%. Food products, although imported, are undeniably more affordable.

For several years, France has adopted a policy focused on consumer purchasing power, conditioning them to opt for lower-cost purchases. When we consider that the hourly cost in Poland is four times lower than that in France, the competition becomes fierce despite the lightness of their environmental and health standards. Due to a lack of profitability, France has thus relegated part of its crops.

Faced with this competition, many French farmers have embarked on a race for profitability and expansion, forcing them to invest massively in equipment that meets their needs. new needs.

These colossal investments have led most farmers into a vicious spiral of debt, from which few have managed to emerge. A colossal burden, knowing that in 2017, nearly 20% of farmers did not receive any income...

Today, the agricultural world is in the grip of an economic, but also social, crisis. In addition to financial pressure from production changes, farmers face unprecedented moral pressure. Consumers have been questioning conventional agriculture based on petrochemicals for several years, in favor of organic agriculture that respects life.

“Farm bashing,” or the denigration of traditional agriculture, has become commonplace, undermining the trust we place in our farmers.

THE ALARMING OBSERVATION OF

GERMAN DEFENSE MINISTER

EUROPE MUST BE READY FOR WAR…

Europe “could face dangers” from Russia by the end of the decade. EU countries must develop their defense industries in order to be ready, German Defense Minister Boris Pistorius said in an interview with Welt am Sonntag on Saturday (December 16).

“[Vladimir Putin's] threats to the Baltic States, Georgia and Moldova must be taken very seriously. These are not mere threats in the wind. We could face dangers by the end of the decade,” Mr Pistorius said.

It is high time for European countries to adapt to the changing geopolitical landscape, especially as the United States may reduce its presence on the continent, he added.

“It will take time for the defense industry to increase its capabilities. We now have five to eight years to catch up, both in terms of the armed forces, industry and society,” insisted the Minister of Defense.

100 billion euros for the Bundeswehr

After Russia's invasion of Ukraine, the German government stepped up efforts to rebuild its ailing armed forces, also relying on a special 100 billion euro fund set up by the government at the continuation of the attack

Mr Pistorius was appointed defense minister earlier this year, replacing Christine Lambrecht.

Last month, Mr. Pistorius presented new defense guidelines, setting a goal for the Bundeswehr, Germany's army, to be "ready for war" and for Germany to assume a role of military leader as Europe's "largest and most populous economy."

His rhetoric caused some controversy in Germany, given the country's pacifist culture, shaped by the experience of World War II.

In the interview, Mr Pistorius reiterated the guidelines' call for increased collaboration on European defense.

The Weimar Triangle, an informal forum between Germany, Poland and France.

The 2023 guidelines describe the EU's defense role as primarily "complementary" to NATO's defensive capabilities "through economic, humanitarian and financial measures." Instead, Pistorius said it was possible to strengthen coordination through the Weimar Triangle, an informal forum between Germany, Poland and France.

“We are very interested in [adding a military component to the Weimar Triangle],” Pistorius said, adding that he had invited new Polish Prime Minister Donald Tusk to Berlin and was considering travel to Poland as soon as possible in the new year. The government's promise to revive the forum and encourage closer ties with Poland went largely unheeded under the government of Mr Tusk's predecessor, Mateusz Morawiecki.

EU strategic autonomy: between geopolitics and protectionism

Growing calls for Europe to strengthen its autonomy and reduce its dependence on other countries in strategic areas have divided the EU, as competition intensifies on the international scene.a defense, a sensitive point

The concept of Europe's strategic autonomy in defense became evident after Russian aggression in Ukraine, with analysts suggesting that Europe must find its place in the geopolitical complexity of today's world.

Isolationist sentiments in the United States

Ionela Maria Ciolan, a foreign policy and defense expert at the Wilfried Martens Center for European Studies, said Europe's post-Cold War security architecture has collapsed as Russia "seeks to redraw borders." Europeans by force.

“Meanwhile, isolationist sentiments in the United States, fueled by perceptions of insufficient European defense contributions, could further strain transatlantic relations if Donald Trump were to be [re-elected],” she said. note.

If such a scenario comes true, Ms. Ciolan expects that American support for Ukraine will decline and that Europeans will become increasingly responsible for the security of the European continent and the fight against the Russian threat.

The risk reduction strategy towards China

“Europeans should fill the gaps in military capabilities within NATO and the EU. The concept of EU strategic autonomy is not a challenge to the United States or NATO, but an effort to jointly strengthen European defense capabilities. »

“Concretely, the EU's strategic autonomy in matters of security and defense also means the strengthening of the European pillar of NATO,” she continued, insisting on the fact that Europe should rely on national suppliers or countries that share the same values ​​as it.

We have already reduced our dependence on Russia, but we must intensify our risk reduction strategy vis-à-vis China […]

The EU's policy towards China should be based on the principles of cooperation where possible, competition where necessary and confrontation where necessary,” she said. concluded.

FRANCE WORLD TAX CHAMPION

It is difficult to be surprised, each French citizen is unfortunately more and more aware of it, France is the world champion for taxes.

In 2022 46.1% of GDP

With an amount of compulsory deductions representing 46.1% of GDP in 2022, it is ahead of Norway and Austria.

According to the 2023 edition of "Public Revenue Statistics" just published by the OECD, France once again became the world tax champion in 2022, with a rate of compulsory deductions (PO) representing 46.1% of GDP, compared to 45.2% in 2021.

It dethroned Denmark from its first place, where the level of taxation recorded a spectacular drop of 5 points of GDP last year, to 41.9%, "mainly due to the contraction in tax revenues on income", explains the OECD. Denmark is now relegated to seventh place in the world.

It is Norway that we find, behind France, in second place in the 2022 ranking of the most taxed countries (44.3% of GDP, + 1.8 points compared to 2021), mainly due to a jump in corporate tax (IS) revenues from exceptional profits made by companies in the energy sector.

With a PO/GDP ratio of 43.1%, Austria takes third place, ahead of Finland (43%) and Italy (42.9%).

Mexico has the lowest rate among OECD countries

At the other end of the scale, Mexico is, among the 38 OECD countries, the one with the lowest level of compulsory taxes (16.9% of GDP), followed by Colombia (19. 7%), Turkey (20.8%) and Ireland (20.9%).

In comparison, this ratio stands at 27.2% in Switzerland, 27.7% in the United States, 35.3% in the United Kingdom and 39.3% in Germany.

On average, the amount of taxes represented 34% of GDP in the OECD area in 2022, down 0.2 points compared to 2021, mainly due to reductions in energy taxes decided in the face of the surge lessons.

The decline observed in 2022 followed two years of increase during the Covid-19 pandemic (+0.2 points in 2020 and +0.6 points in 2021).

Finally, in the long term, the tax/GDP ratio is rising sharply in OECD countries, having increased from 24.9% on average in 1965 to 34% in 2022.

During this period, it increased by almost 13 points in France (from 33.4% to 46.1%) but by just over four points in the United States (from 23.5% to 27 .7%).   

CHANGE IMMIGRATION POLICY

IN FRANCE

BUT WITH MORE POLITICAL COURAGE

After the pension reform, the bill on asylum and immigration is currently giving rise to lively debates, the most controversial text of the start of the five-year term. Postponed twice, it resurfaced three weeks after the Arras attack, in a context of conflict in the Middle East. An Odoxa poll for Public Senate reveals that more than two thirds of French people support this bill, considering that it will allow better control of immigration, while 74% of French people believe that there is an overpopulation of immigrants , according to an Odoxa survey published in May 2023. Indeed, the proportion of immigrants in the population has continued to increase, with a major transformation in the origin of immigrants, mainly of non-European origin and of Muslim faith. These cultural and religious differences often make assimilation difficult.

This bill, which will be examined by senators from November 6 and by deputies in December, has been the subject of intensive negotiations for more than a year. The executive, having a relative majority in Parliament, must seek allies for its adoption.

Surprising figures among LFI voters

An Opinion Way poll for Le Parisien provided remarkable figures that reflect general sentiment. 77% of French people believe that society has difficulty integrating foreigners. 80% think that France does not manage expulsions effectively. 81% criticize the shortcomings in the fight against illegal immigration. 78% favor a referendum on immigration, although this is currently impossible due to constitutional rules, which President Emmanuel Macron may be considering changing. 91% want a strengthening of expulsion measures for foreigners representing a serious threat to public order. It should be noted that 85% (!) of La France Insoumise voters share this repressive desire. 78% demand a reduction in the number of possible appeals against expulsion decisions. 65% of Jean-Luc Mélenchon's supporters support this position.

The article that crystallizes passions

Article 3 of the bill crystallizes passions. It concerns the regularization of undocumented workers in sectors in tension. In recent weeks, pressure has increased around this article, which particularly divides Republicans and centrists. He proposes the creation of a temporary residence permit for foreign workers in sectors with a labor shortage.

The Republicans are firmly opposed to the idea of ​​issuing a “full right” residence permit to undocumented immigrants employed in sectors in tension, fearing that this would constitute a migratory “call for air”. The centrists, for their part, are in favor. They proposed a rewriting of the article, which provides for "exceptional regularization within the framework of the discretionary power of prefects", while removing the requirement for written authorization from the employer to request regularization, in order to avoid the “low-wage traps”.

Despite these disagreements, the President of the Senate, Gérard Larcher, called for caution during a group meeting, stressing that we must not "break all the dishes". A Senate which returned a blank copy would have the worst effect for Gérard Larcher, who defends the role of stabilizer of the Senate.

“In these times when the institutional balance has been profoundly modified due to the absence of a majority in the National Assembly where the majority fact is no longer, the Senate has an essential role in the functioning of our Institutions. It has managed to be the point of balance for a struggling democracy,” he claimed on October 2.

Marine Le Pen, who had not yet taken a position on the bill, indicated that she could ultimately vote in favor of this "small law with small measures which improve the situation a little bit" if the article 3 was deleted, thus seeking to thwart the Republican strategy. However, the left continues to present a disunited front on the issue of immigration, with La France Insoumise refusing to support the regularization of undocumented workers.

The possibility of a 49.3

It remains to be seen whether the government, in desperation, will resort to article 49.3 of the Constitution to have the text adopted by force. Gérald Darmanin defends his bill on immigration as "a text of general interest for the French", and he has a major advantage: a large majority of French people are calling for an indisputable toughening of immigration policies and of immigrants.

The bill presented by the Minister of the Interior is part of a long tradition of immigration policy which oscillates between firmness and permissiveness. But this initiative seems insufficient to many experts to fundamentally change the situation.

One more law that is very ineffective in terms of control

In 1985, France gave up control of its land borders by signing the Schengen agreements, favoring the free movement of flows , including humans. However, after the migration crisis of 2015 and the massive arrival of illegal migrants in Europe, the European Commission showed itself powerless. To counter this, it created the European Border and Coast Guard Agency, commonly known as Frontex, whose role is to protect borders. However, the initial budget allocated to Frontex was paltry, well below the annual budget of a small French town, reflecting the contradictions between respect for borders and the European Union's principles of openness and individual rights.
As a result, the Schengen Area's borders remain porous, allowing migrants to freely enter Europe through various routes.

The all-powerful Court of Justice of the European Union (CJEU)

Despite France's attempts to reestablish lasting controls with Spain and Italy after the 2015 attacks, the Court of Justice of the European Union reiterated that such pushbacks are contrary to the Schengen agreements in a ruling last September. The overall trend is towards more openness and less firmness, as evidenced by previous decisions of the CJEU.

The solution lies in the Member States of the European Union. The Minister of the Interior campaigns alongside Italy for the creation of international zones near illegal entry points, in order to prevent migrants from entering European soil until their administrative situation is resolved , instead of letting them disperse throughout Europe, from where they generally do not leave. Some believe that revising the Schengen agreements is necessary to address these problems, without necessarily withdrawing from them.

France's attractiveness for migrants is largely explained by the generosity of its reception system. Certain measures, such as State Medical Aid (AME) or the unconditional right to housing, are not imposed by European obligations. They could have been included in the bill currently under discussion, but they were not. As a result, many associations working to welcome migrants influence public policy by acting against expulsions and increasing legal recourse.

Another major problem lies in expulsions, which come up against budgetary and diplomatic constraints. Administrative detention centers (CRA) lack places, the costs linked to expulsions are high, and diplomatic relations with countries of origin complicate forced returns.

Although measures have been taken to create more places in CRA, it is necessary to double or even triple their number. France could also exert diplomatic pressure to facilitate expulsions, in particular by reducing the issuance of visas or diplomatic passports....

END OF LONG AUTOMOTIVE SECTOR STRIKE IN THE UNITED STATES

These agreements are the result of several weeks of negotiations and sacrifices made by workers in the sector, who played a crucial role in keeping the automobile industry afloat, particularly during the great economic crisis of 2009, according to the American president.

The strike began on September 15 due to the lack of agreement during the revision of collective agreements. It mobilized more than 45,000 of the 146,000 UAW members employed by these three American automobile giants. It is the first time since the creation of the union in 1935 that the "Big Three" have been simultaneously affected by a strike of this magnitude, which intensified over the six weeks of conflict.

After initiating walkouts at secondary plants and parts distribution centers, the UAW struck hard by targeting the largest and most profitable plants of each auto company based in Detroit, Michigan. Ford's Kentucky Truck Plant, generating annual sales of $25 billion, was hit by the strike on October 11. The manufacturer finally reached a preliminary agreement on October 25, after 41 days of strike, followed by Stellantis (Chrysler, Jeep, etc.) three days later.

Shawn Fain, president of the UAW, was pleased with the results of the negotiations, saying: “Ford put on the table 50% more than when we walked out. Once again, we have achieved what we were told was impossible just a few weeks ago. » Salary increases over four years, cost-of-living adjustments, social benefits, improvements for retirees, and measures specific to each group are part of the preliminary agreements.

Stellantis has committed to creating 5,000 jobs, a major move given previous planned job cuts, including controversy over the closure of a factory in Belvidere, Illinois, which was ultimately averted . The agreement with Stellantis also calls for a 25% increase in base salaries by 2028.

Ford also agreed to a 25% increase in base salaries, a compromise below the 40% initially requested by Shawn Fain at the start. of the strike, but significantly higher than the 9% proposed by the group in August.

These preliminary agreements will still have to be validated by a national committee of the union before being put to a vote by members, a step which could take up to two weeks, according to a source close to the negotiations last week.

However, the union has already announced that Ford and Stellantis employees will return to work immediately, without waiting for these votes.

IN THE UNITED KINGDOM GRANTING INFLATION KILLS

This galloping inflation endangers the living conditions of the British, particularly the most vulnerable.

According to a study published on Monday September 25, 2023 in the British medical journal BMJ: “the economy directly influences the health of the population.

“According to this study, the number of early deaths, that is to say before the age of 75, could increase by almost 6.5% due to an increasingly high cost of living.

“14% of the UK population will suffer from food poverty in 2023”.

This crisis “risks shortening lives and significantly widening wealth and health gaps” between the rich and the poor in the United Kingdom, according to projections from this study.

“The poorest households have paid the price, as they spend a larger share of their income on energy, the cost of which has skyrocketed,” the study reads.

Even more alarming, the University of Sussex study indicates that “14% of the UK population will suffer from food poverty in 2023. Access to food in the UK is very unequal”. Being hungry has become the 'new normal' for millions of British households.

Stagnating life expectancy in the United Kingdom

Researchers assessed the impact of inflation on death rates in Scotland in 2022-23 by assessing different scenarios, with and without government measures to alleviate this cost of living crisis, including helping households facing energy costs.

Without any mitigation measures, inflation could increase early deaths by 5% in the least deprived areas and by 23% in the most deprived, according to researchers' projections. With the government's measures, inflation leads to an increase in early deaths of 2% and 8% respectively.

The researchers worked on Scotland, but assure that "similar effects are likely" across the United Kingdom, because they "modeled the impact of measures taken by the British government".

“Our analysis helps demonstrate that the economy has an impact on population health,” the researchers conclude. “Since 2012, economic conditions in the UK have led to a decline in life expectancy and widened health inequalities.”

Far from being optimistic about the evolution of the situation, the Resolution Foundation study concludes by indicating that if the British do not manage to stem inflation, the living conditions of their population could fall to comparable levels to those of the 50s.

PROPERTY TAX EXPLOSIONS IN FRANCE

The economic press even speaks of an "explosion" of this tax, with double-digit increases which far exceed the inflation rate (+51.9% in Paris, +31.5% in Grenoble, +21.2 % in Troyes, +20.5% in Metz, +19.6% in Issy-les-Moulineaux, etc.).

Although the General Directorate of Public Finances stressed last August that these spectacular and publicized increases do not necessarily define a trend, it is undeniable that something is afoot in terms of property taxes. Let’s examine the reasons behind this potentially trending increase.

First, it is important to note that we are only talking here about the property tax on built properties,

In reality, other levies are associated with the TFPB, such as the household waste collection tax, the Gemapi tax for the management of aquatic environments and flood prevention, as well as certain special equipment taxes. These ancillary taxes follow their own dynamics and contribute to the total increase in the bill.

The property tax on built properties is calculated quite simply: it results from the product of a base, in this case the estimate of the value of your real estate, multiplied by a tax rate. The annual evolution of these two components is shared between several actors:

- The cadastral rental value, which fluctuates each year according to a revision index, previously determined by parliamentarians within the framework of the finance law.

- The tax rate, for its part, is the responsibility of the local authorities receiving the tax, such as the municipalities and intercommunities, which vote on it each year at the same time as their initial budget.

In 2023, the property tax base on built properties saw a record increase of 7.1%.

This exceptional increase follows an already notable increase of 3.4% in 2022. To put these figures in perspective, remember that between 2005 and 2015, the average annual increase was 1.6%. This is the main driver of the property tax increase.

So why such an increase, when we could expect parliamentarians to ensure that the purchasing power of their fellow citizens is preserved?

Since the 1980s, parliamentarians have adjusted the annual indexation of the base by officially taking into account the variation in rents, but in reality depending on the economic and social context. However, within the framework of the finance law for 2017, parliamentarians decided to depoliticize this increase by automating it, now based on the consumer price index.

Unfortunately, no one could have predicted the return of inflation that we are experiencing today, and parliamentarians have renounced a historic prerogative that was theirs.
As long as there is inflation, in accordance with the current framework, the property tax base will therefore continue to increase.

One might think that if the base increases at the rate of inflation, the property tax rate could remain stable. However, this is not the case, for several reasons:

On the one hand, the other sources of income of municipalities and their intermunicipalities are increasing less quickly than inflation. State allocations, which were traditionally adjusted according to inflation and part of growth,

On the other hand, we are currently in the first half of the local electoral cycle, with the mayors elected in 2020, re-elected in 2026, who naturally increased local tax rates in 2022 or 2023 to finance the implementation of their programs, thus avoiding having to do so in the run-up to the next elections.

Finally, the housing tax having been abolished, just like the professional tax a decade ago, no new tax tool has been put in place to fill this void.

As a result, when local governments need to increase their budgetary resources, they have virtually no choice but to increase property taxes.

These explanations only cover the main reasons for this increase.

Local elected officials also cite the need to invest in public projects in line with citizens' expectations, to restore budgetary balance after years of massive public spending, to absorb budgetary increases imposed by the State, such as the increase in salaries of civil servants, among other more or less legitimate justifications.

What about the future ?

In 2023, will it be a record year or simply an additional step in the continued increase in property taxes?

Forecasts are uncertain, even for the best analysts.

But it is unlikely that the bill will continue to increase in the years to come.

This is largely explained by the investments necessary to adapt our cities to the challenges of climate change, which municipalities and their intermunicipalities are facing as a priority.

TEN YEARS OF THE SILK ROADS

A TITANIC CHINESE PROJECT

Historically, the Silk Roads were a network of trade linking the Chinese world to the Mediterranean basin, since Antiquity. Archaeological excavations have thus revealed the existence of monetary circulation over very long distances.

The New Silk Roads, a Chinese strategic project initiated in 2013, go far beyond their historical heritage. The aim is to economically connect China to Europe by integrating the regions of Central Asia through an extensive network of road and rail corridors. This program aims to establish a new generation of transnational trade platforms. In addition, in its maritime component, this network of trade routes includes the African coastal regions of the Indian Ocean.

In English, the expression Belt and Road Initiative (BRI) replaced from 2017, in official terminology, the expression “One Belt, One Road” (“one belt, one road”) or OBOR to erase the “predatory” image of the project.

tToday, these Silk Roads have become a much broader label than just "road" and "belt", extending as far as South America. They mainly bring together nations from the “Global South”, developing countries often dissatisfied with the world economic order dominated by the West and the United States. Not since the Marshall Plan has the world seen such a large-scale project, raising concerns in the West, where we see China building a powerful instrument of economic and political power on a global scale.

Chinese economic objectives

China's objectives in this initiative are multiple on the economic level. It seeks to increase its exports, sell off its industrial excess capacity, and find new markets for its construction and public works companies. Central Asia offers a growing market for these ambitions. In addition, these new trade routes allow China to diversify and secure its energy supplies, reducing its dependence on the Gulf countries and Russia. By establishing cooperation agreements with countries such as Sri Lanka, Bangladesh and Burma, China is also strengthening the security of its new supply routes.

Political objectives

Politically, the objective is as much domestic as international. Internally, China must ensure the integrity of its territory. The province of Xinjiang, very rich in raw materials and at the crossroads of hydrocarbon routes, is regularly plagued by ethnic conflicts. Beijing wants development aid for neighboring countries (Afghanistan, Kazakhstan, Tajikistan, Kyrgyzstan) to reduce instability at the borders and inside the country. The internal objective is grafted onto a regional policy objective in Central Asia: to extend Chinese influence against the historic Russian actor, and to assert itself as a stabilizing actor in international relations.

The deployment of the Silk Roads

Initially, China's colossal projects impressed and attracted the desire of African governments. Many infrastructures have emerged on the African continent thanks to Chinese investments even if the tap has closed in recent years, faced with the weight of debts contracted and the slowdown of the Chinese economy.

In Mozambique, a suspension bridge, the longest in Africa, now spans Maputo Bay. Cost of this work: more than 750 million euros.

In Kenya, a railway line of some 500 kilometers has been linking the capital Nairobi and the port hub of Mombasa since 2017, costing $5 billion, one of the country's most expensive projects since its independence. Djibouti, which has a host of megaprojects and hosts Beijing's first external military base, has seen the development of the Doraleh terminal, for $590 million.

However, the Chinese offer is increasingly criticized, in particular for financing in exchange for contracts awarded to Chinese companies, to the detriment of other international or African players. The concept of “win-win partnership” touted by China is reaching its limits, generating debt, networks of influence, dependence and local environmental and social impacts. Its detractors today speak of debt trap diplomacy.

“Debt trap diplomacy”

Thus, the port of Hambantota in Sri Lanka is now under the control of a Chinese state enterprise for 99 years, in order to repay part of the debts. Many countries are realizing that these investments are really just loans at ever-increasing interest rates, creating financially unsustainable debt nationally. An Indian researcher crystallizes these criticisms in a catchy expression: “debt trap diplomacy”.

The same goes for Montenegro. A highway renamed the most expensive in the world, whose work was financed by Chinese loans, has literally plunged the public finances of this small country into the red, creating a dangerous allegiance to Beijing.

If Italy plans to leave the Belt and Road Initiative project, Berlin for its part is wondering. China is Germany's largest trading partner. It is through the port of Hamburg but also of Duisburg that the main goods pass. Duisburg, Europe's largest river port, in the Rhine Valley, has become one of the last stations for Chinese trains. Debates over dependence on China have put a stop to many projects.

Opening up access to strategic installations in Asia, Africa, the Persian Gulf, Europe and even the Americas, this seems to be Beijing's real objective.

Brussels therefore sought to regain control, in particular so as not to leave the field open to Beijing, particularly in Africa. The EU has launched its own infrastructure development project called “Global Gateway”.

A contrasting record in Africa

In Africa, however, the results are rather mixed. Indeed, China has managed to integrate the vast majority of African countries, with the exception of Mauritius and Eswatini - which recognizes Taiwan. China has increased its financing capacities, largely more than investment, also stamping all infrastructure projects as part of the new Silk Roads, and even for those launched before 2013. From this point of view, the project is relatively a success.

In addition, the Silk Roads are not only focused on the infrastructure sector, but also on other sectors linked to the development of cooperation in agriculture, health, education for example which correspond to local wishes. development of partner countries.

At a time of the war in Ukraine and the economic slowdown of Chinese power, it is difficult to assess the scale of the Belt and Road initiative, as it is called in English.

However, the project is far from representing a planned economic offensive by China.

The scattering of investments between very varied sectors (transport and energy, but also agriculture, real estate, finance, etc.) and on all continents makes the project lose its consistency and its readability, which internal critics denounce in China even within the CCP...

But the reality is there: Chinese companies display their logos on all continents, while the influence of Europeans is declining. They came to the aid of countries in dire need.

AUSTERITY A NECESSARY EVIL

THAT GOVERNMENT AND FRENCH REFUSE

To reduce France's indebtedness, 10 billion euros in savings by 2027 are therefore on the agenda, to be dipped at will in social protection or health, or even by betting on new reforms. , such as pensions or unemployment insurance

Plane strokes are a French specialty. Since 2007, the acronyms follow one another. The RGPP with Nicolas Sarkozy, the MAP of François Hollande, then, under the first five-year term of Emmanuel Macron, the CAP 2022 plan, are all failed throws – or semi-failed – to straighten out the degraded accounts of France.

That the 2024 budget makes it possible to achieve "at least 10 billion euros in savings" as affirmed by the Minister of Economy and Finance Bruno Le Maire, the Court of Auditors seems to doubt it. Overly optimistic economic assumptions, declining tax revenues, need to finance a green transition, financial magistrates consider the promised efforts insufficient. And economics professor Jean-Marc Daniel gives us a brilliant analysis on this subject in an article in TheConversation.

Insufficient effort

When we analyze France's public finances, we immediately see a spectacular increase in the weight of expenditure in relation to GDP. This rose from 34.7% in 1960 to 55.4% in 2019, just before the Covid-19 pandemic, and to 59% in 2021, after the confinement period.
This evolution seems to translate an implicit refusal of the population to accept the reality of public charges or at least an explicit will of the government not to confront the population with this reality. The most tangible consequence is a steady increase in public debt. In the first quarter of 2023, it exceeded the symbolic threshold of 3,000 billion euros, or 112% of GDP. At the time of the introduction of the euro in 2002, the debt amounted to 936 billion euros, which is more than three times its current amount.

However, it is very likely that the population has understood that an increase in public spending today will have to be financed later. This has generated a savings reflex to face this uncertain fiscal future: it is better to build up reserves when an effort will be required. This trend has led to an increase in asset prices. Real estate bubbles and the strong comeback of gold are the most obvious manifestations of this situation. The household savings rate, which was 14.5% in 2003, now stands at 18.3%.
This mechanism, known as "Ricardian equivalence", was highlighted in 1974 by the American economist Robert Barro in an article entitled "Are Government Bonds Net Wealth ?". Barro states the "Barro-Ricardo theorem", according to which "public debt reduction - that is to say the budget deficit - generates an equivalent increase in private savings".

Public debt with harmful consequences

Public debt has major drawbacks.
First, there is a question of balance between supply and demand. Any public expenditure not financed by a drain on private expenditure increases demand. If this increase is maintained over time, it leads either to increased dependence on imports, widening the current balance of payments deficit, or to an opportunity offered to the production system to increase its prices, thus causing inflation.
In practice, France has rather accumulated external deficits. Its net foreign assets, ie the difference between the value of French assets abroad and that of assets held by foreigners in France, is increasingly negative. It went from -40 billion euros at the end of 2001 (i.e. 2.7% of GDP) to -800 billion euros at the end of 2021 (i.e. 32% of GDP). This results in a loss of sovereignty which, although often overlooked, poses a threat to future generations.
The second drawback lies in the anti-redistributive nature of the public debt. This situation could be described as "Robin Hood in reverse", where the State plays an inverse role to that of Robin Hood by levying taxes on the entire population to pay interest to the holders of public securities. who are usually among the wealthiest. With the current rise in interest rates, this mechanism will only become more pronounced.
In addition, we can add to these elements the progressive suffocation of the room for maneuver of the State, forced to devote more and more resources to the payment of interest on the debt (42 billion in 2023 and risks rising to 70 billion in 2027.), the disruptions in the financing of the economy caused by the withdrawal of savings operated by the State, as well as the weakening of our relations with our European partners due to the non-respect of the treaties.

For a policy of austerity?

Should we then return to austerity policies? It was the socialist Prime Minister Pierre Mauroy who introduced this expression in March 1983. Criticized for having abandoned the promises of 1981 and for carrying out a policy similar to that of Raymond Barre, his more liberal predecessor, he claimed that it was not not the case. According to him, "rigor is austerity plus hope".
In the current context, similar measures, also called "austerity", seem to be necessary. The challenge lies more in their content than in their principle. In 2017, in its document titled “Better Policies for Better Lives”, the Organization for Economic Co-operation and Development (OECD) wrote:

“Fiscal consolidation, which is about regaining control of public budgets, requires difficult political choices regarding public expenditure and revenue.

This means re-examining social protection systems to avoid waste and strengthen incentives to work, as well as cutting the salaries of civil servants."
The OECD studied the fiscal recovery plans of 24 countries between 1978 and 2002, i.e. 85 periods of consolidation, and found that, in general, these measures slow growth in the short term, but that it recovers relatively quickly while long-term growth improves.

Two cases are particularly highlighted in this study: Denmark between 1983 and 1986 and Ireland in 1987, where austerity was even accompanied by an acceleration of growth from the outset.
One of the reasons for their success is that austerity was combined with measures to encourage private investment, which took over from public spending. It works on three conditions. First of all, it is essential not to penalize companies by increasing their taxes.

This also applies today, when taxation must become a privileged tool for ecological transition: it is necessary to lighten their tax burden while making it more ecological. Then, we must count on the Ricardian effects in households, whose desire to dissave will manifest itself as soon as they become aware of the positive effects of the policy followed. Finally, it is crucial that the will to conduct a fiscal consolidation policy is clear, so that the dual dynamics of corporate investment and household dissaving can fully assert themselves.

It is essential to recognize the challenges posed by the continued increase in public spending and public debt in France.

Austerity policies can be legitimate if implemented thoughtfully and accompanied by measures that encourage private investment and stimulate the economy.

RIOTS IN FRANCE

A REPUBLICAN START AFTER THE ATTACK

FROM A MAYOR'S HOME ?

The mayors of France called on the population and elected officials to gather Monday at noon in front of all the town halls, invoking "a civic mobilization" after the violent attack on the home of the mayor of L'Haÿ-les-Roses (Val-de-Marne) which aroused a wave of indignation across the country. All town halls in France will sound their sirens at 12 p.m. during these gatherings.

A solidarity march of elected officials and a dense crowd of residents set off to applause on Monday from the town hall of L'Haÿ-les-Roses (Val-de-Marne), the day after the attack on the car-ram against the home of the mayor.

A thousand inhabitants of the town (about 30,000 inhabitants) took part in this circular march around the town hall led by the mayor Vincent Jeanbrun (LR).

Acclaimed by the crowd, the chosen one walking behind a banner "Together for the Republic!" was framed at the head of the procession of the tenors of his party, including the president of the Senate Gérard Larcher, the president of the Île-de-France region Valérie Pécresse and the boss of the Republicans Eric Ciotti.

Start of support rallies in front of town halls

The political class unanimously condemned yesterday the attack on the car-ram on the home of Vincent Jeanbrun, mayor of L'Haÿ-les-Roses (Val-de-Marne), on the sidelines of another night of riots after the death of young Nahel.

. "We will not let anything pass, we will be alongside the mayors", thundered Elisabeth Borne, who went to the city to support the city councilor. LR leader Eric Ciotti described Jean-Luc Mélenchon as "factious" for not having called for calm and considered that the Insoumis was a "danger for the Republic".

By demanding justice before calm, the rebellious leader thinks he can tame anger. "That his partners have called for calm, Jean-Luc Mélenchon pays little attention to it. It is clear that the political and intellectual paralysis of the left, which denounces injustices, which sometimes supports riots, but which does not seem to have a political solution except for necessary police reform...

As for Macron, his trip to Marseille in difficult cities will not have changed anything or appeased anything in the long term. He said he wanted to "transform anger into a project" but the words fell a little flat in the face of the extent of drug trafficking, and in the face of the decline of public services on the ground, in the face of a mother mourning her son. The anger turned into riots.

A heavy economic toll

Emmanuel Macron ruled yesterday that the "peak" of the riots following the death of Nahel had "passed", while remaining "very careful" about the return to calm. The president took the opportunity to announce an "emergency law" to speed up reconstruction in the towns affected by the destruction.

Numbers. The Medef estimated yesterday at one billion euros the damage caused to businesses, 300 bank branches and 200 businesses having been looted. On the public services side: 209 national police premises have been burned or damaged and 150 town halls attacked since last Tuesday.

The economic toll is already heavy, let's beware of yet another "suburban plan"

When it finances targeted actions, public money can be useful in the neighbourhoods. But believing that we buy peace and prosperity with billions of euros is an illusion from which it is time to return.

A France in perpetual crisis

It is France which, as a whole, has been terribly bruised for several days by riots which are said to be more violent than those of 2005. They will harm the tourist season and worry about its ability to organize the Olympic Games in 2024.

France is going through a somewhat perpetual crisis. According to the Algerian essayist Boualem Sansal, "it has entered the zone of storms: crises follow one another and look alike, in almost all areas" . After the terrorist crisis, that of the yellow vests, and the slippages during the demonstrations against the pension reform, all that was missing was this awakening of the suburbs to show how powerless the state is.

And to continue: "France is a weak state and from rioters to Algeria to Islamists, many have understood this and act accordingly"

Who will take over the situation in the coming days. The forces of order, deployed in large numbers, or the drug traffickers, whose riots disrupt business ?

THE END OF MAGIC MONEY HAS A PRICE

THAT OF DISGUISED AUSTERITY WITH THE EFFECTS

 OF ANNOUNCEMENTS BY BRUNO LE MAIRE

Because for Matignon, time is running out: suspended during the Covid, European budgetary rules will apply again next year. And the sharp rise in interest rates is significantly increasing the debt burden, which could become the main item of State expenditure, in a context of slowing growth. "This economic context (...) comes to constrain our equation of public finances and increases the requirement (...) of reduction of expenditure", we explain to the cabinet of Bruno Le Maire.

The end of "whatever it takes"

The government therefore acts the end of "whatever the cost". The Minister of the Economy Bruno Le Maire took advantage this Monday, June 19, 2023 of the foundations of public finances to detail his roadmap for the coming months. Objective: to redress accounts degraded by successive crises. According to the minister, "at least 10 billion in savings" have been identified to restore public finances by 2027.

The slate to pay

After the exceptional expenditure linked to the Yellow Vests crisis, then to "whatever the cost" during the pandemic, the executive is seeking to clean up public finances and has set itself the objective of reducing the deficit to 2, 7% of gross domestic product (GDP) in 2027, below the 3% limit set by the European Union. For the time being, according to INSEE, French public debt reached nearly 2,950 billion euros at the end of 2022, amounting to 111.6% of GDP. As for the deficit, last year it stood at 4.7% of GDP. Figures that place France on the side of the worst European students,

But what levers for "at least 10 billion euros in savings" to allow the recovery of France's public accounts by 2027?

To get back on track, the government thus intends to reduce public spending to 53.5% of GDP in 2027, against 57.5% in 2022. It is counting on the end of the energy shield, the gains from reforms such as pensions or unemployment insurance, full employment or even economic growth that he anticipates to be more dynamic, after a slowdown in 2023.

But also the opening of a project to limit sick leave by the fall, the reimbursement of "comfort or ease of health costs", the end of the Pinel device in housing and the recalibration of the loan device at zero rate - two measures already announced by the government which should allow overall savings of more than two billion euros in the long term, according to Bruno Le Maire.

Another measure adopted, the reduction in the cost of employment aid (learning, CPE, etc.) in the departments where unemployment is low and where there are tensions in certain trades.

In addition, the ministry has announced the end of tax benefits on fossil fuels (non-road agricultural and non-agricultural diesel, road transport), gradually spread over 4 years.

" It's time to get back to normal"

After the massive aid deployed in the face of the health and energy crises, "it is time to return to normal. But that does not mean austerity", justified Bruno Le Maire in Le Journal du Dimanche at the beginning of June.

This is not an austerity programme, the Prime Minister also hammered home during her closing speech at the general assembly of public finances this afternoon, while announcing… exactly the opposite. “Neither a tax increase, nor a planing stroke”, reminded Élisabeth Borne, who explained on several occasions that austerity was “counterproductive”.

But between refusal to increase taxes and social tension, with purchasing power at the center of concerns in the face of high inflation, the room for maneuver is narrow, say economists.

And government hypocrisy is at its peak !

FOR AN INTERNATIONAL CRIMINAL TRIBUNAL LAW

IN ORDER TO END TAX CRIMES

STATES AND THEIR LEADERS

To put an end to tax crimes committed by high-tax states and leaders, it is time to consider the adoption of a new law by the International Criminal Court. This law would seek to punish those responsible for these crimes against the people and businesses, by imposing prison sentences so severe that states and leaders would have an incentive to comply with a maximum tax rate of 5% to avoid be condemned.

Recognize tax crimes :

The abusive practices and oppressive tax policies of high-tax states can be seen as crimes against the people and businesses.

These crimes deprive citizens of resources necessary for their well-being and hinder economic development.

It is therefore crucial to recognize them as such and to treat them with the severity they deserve.

Hold leaders accountable :

Introducing tough prison sentences for executives involved in tax crimes sends a clear message that they are personally responsible for their actions. This would encourage leaders to act responsibly and ensure that public resources are used ethically and efficiently.

Deterrence and behavior change :

The heavy prison sentences would be a deterrent to high-tax states and leaders, prompting them to rethink their tax policies and adopt a more reasonable tax rate. The prospect of significant criminal penalties would encourage them to prefer a fairer and more transparent approach to taxation.

Strengthening international credibility :

The adoption of such a law by the International Criminal Court would strengthen the credibility of the international community in its fight against tax crimes. It would show that tax abuse is not tolerated and that there is an international legal mechanism to hold those responsible for such criminal acts to account.

Protection of the rights of the people and companies :

The new law of the International Criminal Court would aim to protect the fundamental rights of the people and companies, by guaranteeing a fair tax environment conducive to prosperity. It would restore the confidence of citizens and economic players, ensuring a fairer distribution of tax burdens and putting an end to abusive practices.

Passing a new International Criminal Court law, with tough prison sentences for tax crimes committed by high-tax states and executives, would be a decisive step in ending these unjust practices.

This would hold leaders accountable, deter tax abuse, build international credibility, and protect the rights of people and businesses. This measure would be a strong signal that tax crimes will not be tolerated and that serious consequences await those who commit them.

Yes it's time to do with 5% maximum tax, it's possible !

A DEMAGOGICAL SOCIAL ANTI-FRAUD PLAN ?

"This is a ten-year project for which I am setting a first stage: in 2027, we will have twice as many results as in 2022", he says, promising the creation of a thousand additional jobs during this five-year period. and an investment of 1 billion euros in information systems, "in particular to better cross-check data".
Adjustments have already increased by 35% over the past five years. These announcements come three weeks after a first plan, presented in an interview with Le Monde, centered on the fight against tax evasion.

"Our desire is to look at where the situations of fraud are and respond to them, without stigmatization, without instrumentalization", affirmed Mr. Attal to journalists, and "to be neither in denial of a large part of the left nor in the lies of much of the far right".

Fraud to social benefits alone is estimated at between 6 billion and 8 billion euros per year, according to the Court of Auditors. “Social fraud, like tax evasion, is a form of hidden tax on working French people,” the minister told Le Parisien.

Merge Vitale card and identity card

Gabriel Attal explains that he wants to "reinforce" the conditions of residence in France "to benefit from social allowances". It will now be necessary to spend nine months of the year in the country, against six currently planned, to benefit from family allowances or the minimum old age. Similarly, for personalized housing allowances (APL), which only require eight months of presence for the time being.

Another announcement, with potentially concrete repercussions for the French: the government is considering a merger between the Vitale card and the identity card in order to fight against fraud in health benefits. "We can imagine a model where, from a certain date, when you redo your identity card, it automatically becomes your Vitale card", specifies the minister. He adds that a prefiguration mission would be launched by the summer and could reach conclusions by the end of the year. By the way, the idea of ​​a biometric Vitale card seems to have been abandoned, especially given its cost.
Bercy also wants to target retirees living outside European borders in order to better identify those who have died but whose allowances are still being collected. This announcement follows an experiment carried out since September 2022 in Algeria, during which 300 files of "quasi-centenarian" retirees out of 1,000 cases studied were declared non-compliant, affirms the minister, recalling that more than a million pensions were paid abroad, half of them outside Europe.

If no one denies that social fraud exists in France, it is however necessary to put its importance into perspective. The maintenance of this fantasy , according to which France would be full of potential fraudsters, has several objectives, among which that of delaying structural reforms and that of always reinforcing the repressive arsenal of the administration...

To fight against fraud, shouldn't it be necessary, above all and above all, to carry out a radical simplification of the social aid system ?

PROTECTIONIST PUSH IN EASTERN EUROPE AGAINST UKRAINIAN CEREALS

But they are not always re-exported to third countries as they should and pile up in the silos of neighboring countries or close neighbors of Ukraine. They drive down prices there and fuel the anger of local farmers.

On Saturday, Warsaw "has therefore decided to ban the entry, the import of cereals into Poland as well as dozens of other agri-food products", explained the leader of the ruling party, the conservative Jaroslaw Kaczynski.

Otherwise, in his eyes, "it would lead to a serious crisis in the agricultural sector in Poland".

Poland is an agricultural country, the actors of the sector vote, and the elections are approaching.

On April 5, 2023, the Polish Minister of Agriculture and Rural Development, Henryk Kowalczyk, had to resign from his post.

"We support Ukraine, but we must also defend the interests of our citizens."

On the Hungarian side, it is cereals, oilseeds and several other agricultural products, according to a press release from the Ministry of Agriculture. And this, too, in the name of defending the "interests of the Hungarian agricultural community".

Poland, but also other countries in the region – Slovakia, Hungary, Romania and Bulgaria – want the subject to be put on the table again in Brussels.

Agricultural crisis reserve

This Monday, moreover, Slovakia also took action, while continuing to authorize transit, unlike Poland. Bulgaria has indicated its intention to follow suit. Sofia believes that if a handful of countries pronounce an import ban, the flows will transfer to the other countries concerned.

The announcement from Budapest and Warsaw comes as the EU27 adopted, two weeks ago, an aid plan from the Commission of 56 million euros to support farmers affected by the drop in prices. The funds, drawn from the CAP reserve, are to be disbursed by September 2023, and Poland is to be the main beneficiary, with the rest going to Romania and Bulgaria.

A second aid plan is in preparation. Seen from Brussels, it is therefore a reversal on the part of Warsaw, which has so far pleaded for more solidarity with Ukraine. A reversal which risks weighing on the discussions around the renewal of the 2022 agreement, the one which had recorded the lifting of tariff barriers on Ukrainian products for one year.

Customs duty problem

Since last month, these five Member States have in fact expressed the wish that the Commission reconsider its decision on customs duties. New measures, they plead, could be envisaged in order to fulfill the initial objective, the re-export of Ukrainian grain to countries in Africa and the Middle East, while avoiding negative externalities and perverse effects.

"The ultimate goal is not to maintain the import ban indefinitely but to ensure that Ukrainian grain for export goes where it needs to go," the vice tried to play down Monday. - Polish Minister of Foreign Affairs, Pawel Jablonski.

According to official Ukrainian data, some three million tonnes of cereals leave Ukrainian soil each month via the Black Sea, under an agreement concluded under the aegis of the United Nations and Turkey, while 200,000 tonnes additional ones are routed through Poland to European ports.

Exclusive jurisdiction

The European Commission really did not appreciate the initiative of the countries of central Europe. "It is important to stress that trade policy is an exclusive competence of the EU and that unilateral actions are not acceptable," insisted a spokesperson. “In these difficult times, it is crucial to coordinate and align all decisions within the EU,” she added.

The current tensions, in hollow, underline the great challenges that Ukraine's accession to the EU would pose, in particular for the common agricultural policy and the cohesion policy.

The country of 604,000 km2 and 44 million inhabitants received EU candidate status last June.

PENSION REFORM

TOWARDS A HARDENING OF ACTIONS ?

Place de Concorde tensions

Thursday, a similar gathering had degenerated during the evening. While nearly 6,500 people gathered this Thursday, March 16, 2023 Place de la Concorde to show their opposition to the appeal of 49.3 to pass the pension reform in the Assembly.

The gathering had degenerated in the early evening when the police decided to evacuate the Parisian square. Clashes then broke out and many fires (garbage cans or vehicles) were lit, before the situation stabilized overnight.

In the end, 258 people were arrested in the capital during these overflows. Similar scenes had been observed in other cities of the country, leading to dozens of additional arrests.

The strategy favored by the unions for several years, namely peaceful demonstrations, based on “numbers”, despite past successes, is not enough – for the moment – ​​to settle the social disagreement on the pension reform.

Harden the movement ?

The unions have hesitated for a long time in recent weeks between continuing to demonstrate or going on strike. Some said they were in favor of this "hardening" from the start, in particular federations of the CGT - railway workers, energy, chemists (including refiners)... - but also the Union Syndicale Solidaires (which brings together the SUD unions), known for its radicalism and an “old-fashioned” type of trade unionism, based on militancy and, often, open conflict.

But what does the word “hardening” mean? It is meant to illustrate a gradation in collective action.

This will no longer consist only of peaceful and intermittent parades.

These will be more determined, even more violent and continuous actions. The objective is to cause disorder in the economy or in social or daily life to make a deaf government give in to street demonstrations alone.

Towards new forms of action ?

Not all unions are in favor of such a development. But no one excludes them anymore. Even the CFDT, which has patiently sculpted its reformist identity for years, does not reject it, at least antiphrasally.

Thus, its leader, Laurent Berger, alluding to the "yellow vests", was surprised recently that the "very violent" (and minority) forms of action had won their case while the demands made by peaceful demonstrations, although more numerous, leave the public authorities indifferent.

How to switch to these new forms of action? Strike of one day, even renewable… In certain sectors, like the garbage collectors of Paris, it is what took shape this week. The threat of "blockades" concerning the supply of fuel is also being waved by some activists.

But will this type of action succeed in settling down over time and carrying weight? We saw last fall that the government was not without legal means, for example by relying on requisitions.

"General strike"

A "general strike" could also be looming even if it has not yet been announced as such. The inter-union prefers the euphemism of "shutdown of all sectors".

Such a strike also seems hypothetical. Those that succeeded – to allude to the Popular Front or May 1968 – were not decreed by the trade union confederations. And the private sector, in particular, does not seem ready for such an eventuality, especially since the direct responsibility of companies is not in question in the reform. As a recent survey by the Ministry of Labor has just pointed out, the rate of unionization in the private sector continues to decline. Consequently, for the trade union organisations, instigating and supervising such a movement seems difficult. The unions are implicitly paying for their estrangement from many grassroots workers, especially the youngest, even if their recent successes in the streets show that they are alive and well.

The “hardening” could also come from a stronger involvement of student organizations. Present in the inter-union, the latter are still little involved and the universities, with some exceptions, do not experience any disturbances.

'Revolt of the sub-prefectures'

The trade union confederations, like Laurent Berger, also insist a lot on what would be a “revolt of the sub-prefectures”. In short, the movement would be particularly active in small towns.

A quick look reveals that the situation is mixed. This increase in demonstrators in certain cities is explained, it seems, by the local importance of public employment. This gives these populations higher than average unionization rates.

Thus, this “revolt of the sub-prefectures” would first reveal the strengths and weaknesses of unionization. But the unions see it above all as examples to follow, the translation of a deep anger in the social fabric.

And yet the executive remains deaf to the rumbling social anger. And says he does not want to give up his pension reform. Today, although a very large part of the public has declared itself unfavorable to the reform, the executive does not intend to give in.

“We cannot play with the future of the country”, would have hammered the head of state Thursday, March 16 in the morning.

The executive chose to force through by resorting to 49.3.

The stakes are as numerous as they are considerable, both internally and internationally. The capacity of France to undertake, after the famous whatever the cost, a recovery of its public expenditure without digging more debt, can only reassure its European political partners. And this is an important issue in this period of rising interest rates.

Beyond the question of pensions, Emmanuel Macron is putting into play his ability to assert his legitimacy in the face of opposition in multiple forms. This is a major test.

Giving in to the streets now could cause Emmanuel Macron to lose all authority for the rest of the five-year term and that is what he fears... in a pre-insurgency atmosphere.

PENSION REFORM

THE GOVERNMENT DRAWS THE 49.3

during the first five-year term, the reform had passed a parliamentary stage, then it had been buried under the sands of the Covid-19 epidemic. It was intended to be systemic, standardizing and universalizing a system of calculation by points instead of years of contribution, putting an end to special schemes.

Today, the new version of this same reform appears to be a major challenge for Emmanuel Macron's second five-year term. It led to a rare trade union in France and a strong mobilization in the streets. It also generated heated debates in the National Assembly, bringing to light the dissension between the right represented by Les Républicains and Macronie.

The sequence continues this Thursday, March 16, 2023 with the use of 49.3.

Elisabeth Borne and her ministers kept repeating that they did not want to use 49.3 and that an agreement was still possible. But after an extraordinary Council of Ministers convened this morning, the government announced that it was going to have recourse to article 49.3 of the Constitution to have the text adopted this Thursday, March 16 in the National Assembly.

“On the basis of article 49 paragraph 3 of the Constitution, I engage the responsibility of my government on the whole of the bill of amending financing law for Social Security for 2023”, announced Elisabeth Borne.

Emmanuel Macron and Élisabeth Borne have indeed chosen the passage in force. The deputies did not vote on this text, the flagship measure of which is the decline in the legal retirement age from 62 to 64 years.

The choice of 49.3 for the eleventh time

A Council of Ministers was convened urgently this morning, in order to establish the strategy chosen to adopt this text. According to a participant in a final meeting of the presidential camp around Emmanuel Macron, "it was considered that there was too much uncertainty about the vote" because of the risk of a lack of majority. "The president wanted to go to the vote, but the Prime Minister considered that because of the uncertainties, she had to ask the President of the Republic to engage the responsibility of the government via 49.3", added this participant.

For a few days, the macronists had indeed been busy to find out if they had a majority of deputies willing to vote in favor of the text, all the counts showing an extremely low margin of maneuver.

No sensitive reform can be undertaken without the prior guarantee of a consensus with a majority share of the representation. The Macronist majority was counting on the LR party and its moderate right torn between its centrist aspirations and its fear of being overwhelmed by the RN.

Deputies and senators reached an agreement on Wednesday on a common version of the disputed project, with the most decried measure, the postponement to 64 of the legal retirement age. This was essential for a final vote on Thursday in the National Assembly.

Thursday, March 16, this text was submitted to the vote of the Senate, where the right-wing and centrist majority unsurprisingly approved it, then in the National Assembly, where the presidential camp does not have an absolute majority. There, the vote was uncertain: if the right-wing party Les Républicains said it wanted to adopt the reform, with this idea that this reform, as Bruno Retailleau said, is the reform of the right and that therefore not voting for it would be incoherent , many slingers in its ranks maintained the suspense.

An admission of failure which shows that the majority, very unstructured, could not convince on this text, in particular on the right.

Today, although a very large part of the public has declared itself unfavorable to the reform, the executive does not intend to give in.

“We cannot play with the future of the country”, would have hammered the head of state this Thursday, March 16 in the morning.

The stakes in this affair are as numerous as they are considerable, both domestically and internationally. The capacity of France to undertake, after the famous whatever the cost, a recovery of its public expenditure without digging more debt, can only reassure its European political partners. And this is an important issue in this period of rising interest rates.

But it is in internal political life that the profit/loss game is potentially strongest.

It could even mark a turning point in this second five-year term ...... while we are still asking questions about the form that social discontent will take.

CAC 40

142 BILLION PROFITS BUT FOR WHOM ?

FRANCE / UNITED STATES / UNITED KINGDOM / SPAIN... WHAT PROSPECTS FOR TRADE UNION ACTION AROUND THE WORLD IN 2023 ?

On Tuesday, January 10, Prime Minister Élisabeth Borne presented the outlines of the future pension reform, which notably provides for the legal retirement age at 64 years. Immediately, eight unions, standing against the project, announced a first day of mobilization on Thursday, January 19. And others in the following months

For the unions, the challenge goes beyond contesting the reform: it is also a question of regaining influence. At the end of 2022, the strikes of train controllers or even general practitioners were initiated by movements born on the Internet which bypassed them. In addition, the unionization rate has stagnated around 10% in France, one of the lowest levels in Europe, for almost 30 years.

What about trade union action elsewhere in the world? Is this shortness of breath found? Do the economic difficulties, on the contrary, give a new impetus to the trade unions? At the start of the year, the American, British, Indonesian and even Spanish experts from The Conversation offer you a global overview.

Canada: Strong unions get results

The Canadian labor movement is one of the strongest in the OECD, the club of developed countries, a strength linked to laws that protect against the phenomenon of “free riding”: workers cannot benefit from collective agreements without being unionized.

The unionization rate in Canada has been around 30% of workers since the beginning of the century, even if it is half as low in the private sector and is slowly declining there. However, the indicator remains high in public services (more than 75%) and growing.

This relative stability has allowed Canadian workers to be better prepared to face the impact of inflation on their paychecks. Unions made higher wage demands than in past decades, and went on strike more frequently (continuing a trend that began in 2021).

From January to November 2022, 156 strike movements took place (a movement is counted as soon as it involves at least ten people over a day) in all sectors. A total of 1.9 million working days were lost, the highest figure for 15 years.

A spring wave of construction strikes in Ontario, Canada's most populous province, symbolized the rise of activism. At the height of the surge, more than 40,000 workers, including carpenters, Placoplâtre installers and engineers, laid down their tools for higher wages. Attempted agreements launched by the authorities have sometimes been rejected by the strikers, prolonging the movement.

Doug Ford, Premier of Ontario has drawn the wrath of the unions. Andrew Scheer/FlickR, CC BY-SA

Another historical fact occurred later in the year. Ontario's right-wing government wanted to use a seldom-used constitutional clause to revoke the right to strike of 55,000 education support workers. The threat of unions, both public and private, to call a general strike in the province, pushed the government to backtrack.

During this time, blockages operated by employers (or lockouts) have practically disappeared. This tactic, by which the latter suspend activity until the workers accept the proposed conditions, was used only eight times from January to November last, whereas we observed about sixty a year ago. ten years.

Annual wage growth increased slightly to average 5% by the end of the year. This rate remains lower than that of inflation (6.8%), but the gap created in 2021 is narrowing.

It remains to be seen whether this union pressure can be sustained and weather rapidly rising interest rates, a likely recession in 2023 and continued government suppression of union rights in some provinces.

United Kingdom: an olive branch for the health service?

Phil Tomlinson, Professor of Industrial Strategy, University of Bath

The winter of anger continues in the United Kingdom: the country suffers its biggest wave of strikes for more than 30 years. Most take place in the public sector, where wage developments remain well below inflation and lag considerably behind private companies.

The bitterness is pronounced after a wave of austerity and the decline in real wages of the 2010s. The strikes – estimated to have cost £1.7bn (€1.92bn) to the UK economy in 2022 – are coordinated by different unions, adding further public inconvenience.

Nevertheless, the British government categorically refuses to give in. He hides behind the independent recommendations of public sector pay review bodies, even if he has not always followed them. He also claimed that public sector pay rises in line with inflation would cost every UK household £1,000 (€1,130) more a year, although that figure has been denied.

Her Majesty's Treasury, the government department in charge of setting economic policies, also echoes the Bank of England's concerns about the onset of a wage-price spiral. However, it seems unlikely: current inflation is largely due to supply shocks following the health crisis and the outbreak of war in Ukraine, and average wage growth remains well below inflation.

There are economic arguments for a generous deal, especially in the National Health Service (NHS): with more than 133,000 unfilled vacancies, better pay could help improve retention and staff recruitment.

Healthcare workers in the UK have repeatedly stopped work to demand pay increases, such as paramedics on December 21.

Of course, financing these measures in a recession involves difficult choices. A tax increase would be politically costly, as the tax burden has never been so high for 70 years. The use of government borrowing could worsen inflation if the Bank of England increases the money supply through quantitative easing.

Public opinion appears to be broadly supportive of the strikers, particularly those in the NHS. However, if the government caves in one area, it sets a precedent for others, with potentially greater economic consequences.

Regarding the NHS, he could instead bring forward the negotiations of the public sector pay review body to 2023, in order to allow an improvement in the agreement, possibly accompanied by a hardship bonus. Elsewhere, he will likely hold his ground hoping that the unions will lose their resolve.

Australia and New Zealand: strikes remain rare despite inflation

Jim Stanford, Economist and Director of the Center for Future Work, Australia Institute

Strikes in Australia have become very rare in recent decades due to restrictive laws passed since the 1990s. Despite historically low unemployment and wages lagging far behind [inflation]. These laws still make it possible to short-circuit most union actions.

In 2022, the unionization rate has fallen to 12.5% ​​of employees, a historically low level. In 1990, it was still over 50% of workers. Union members can only legally strike after negotiations, ballots and specific action plans have been made public, thereby fully revealing the union's strategy to the employer. Even when there are strikes, they tend to be short.

A total of 182 labor disputes took place in the year ending in September. (Statistics do not distinguish between strikes and employer lockouts, which have become common in Australia). This figure is similar to the years before the pandemic and represents only a fraction of the industrial stocks of the 1970s and 1980s.

The only visible surge in strike action in 2022 remains a series of one-day protests organized by teachers and healthcare workers in New South Wales, the country's most populous state. After enduring a decade of austere wage caps by the conservative state government, it was too much when inflation hit.

Most other workers remained passive, even as Australia experienced some of the slowest wage growth of any major industrial country. Nominal wages have grown on average only 2% per year over the 10 years to 2021. This rate fell to 3.1% at the end of 2022, but this is still half the inflation rate of 7.3%.

The newly elected Labor government in Australia passed a series of significant labor law reforms at the end of 2022, aimed at strengthening collective bargaining and wage growth. This could herald a gradual improvement in the bargaining power of workers in the years to come.

The outlook for industrial relations in New Zealand is, on the other hand, somewhat more hospitable to workers and their unions. The unionization rate increased in 2021, reaching 17% of employees (compared to 14% in 2020). The ordinary average hourly wage has grown by an impressive 7.4% over the last 12 months, thanks to a 6% increase in the minimum wage decided by the Labor government.

Industrial actions remain rare – perhaps in part because workers are managing to raise wages in other ways. No official strike data is available for 2022, but in 2021 only 20 strikes took place, down sharply from an average of 140 per year in the previous three years.

Indonesia: anger over labor law reforms

Nabiyla Risfa Izzati, lecturer in labor law, Universitas Gadjah Mada

A few weeks ago, the government replaced its controversial "Omnibus Law" with new emergency regulations, in response to the Indonesian Constitutional Court's ruling that ruled it unconstitutional in 2021.

Adopted at the end of 2020, the omnibus law embodied President Joko Widodo's ambition to attract foreign investors by reducing red tape, but at the expense of employee rights. It made it easier to dismiss without notice.

Indonesian President Joko Widodo had to abandon his Omnibus law, at least officially. Picryl, CC BY-SA

Legal severance pay has also been lowered and the maximum duration of temporary contracts has been extended, while ignoring worker protection. In 2022, the new formula for calculating the minimum wage also resulted in the lowest annual increase on record. The law has drawn widespread criticism from workers, activists and civil society organizations.

The new emergency regulations are arguably even more problematic. The majority of its provisions merely copy the omnibus law. Several changes and additional provisions are actually confusing and duplicative of previous regulations, while leaving many loopholes that could be exploited in the future.

Yet despite complaints from workers and unions that the new rules were passed suddenly and without consultation, there is no talk of a strike. The mode of action remains unpopular because they can only be organized with the authorization of the company concerned. If workers organize unofficial strikes, employers have the right to get rid of them.

Public protests are an obvious alternative, although pandemic rules limiting mobility and mass gatherings have made them difficult. Even so, thousands if not millions of workers organized movements in their respective cities during the second half of 2022.

The workers demanded that the Omnibus law be revoked and that the government not use the formulas for calculating the minimum wage stipulated in the law. The protests intensified when the government raised fuel prices in September, which pushed up already high inflation due to rising food prices.

Political authorities have since issued a separate rule to determine the 2023 minimum wage. So the demands have been successful in some way, but workers and employers alike remain furious that minimum wage rules have changed again as part of emergency regulations.

It is clear that the demonstrators did not obtain the suppression of the other rules resulting from the omnibus law. Some workers protested on social media. It may not prompt the government to change the law, but a few viral tweets have prompted several companies to change their abusive practices.

The controversy is set to continue into 2023 and into the 2024 election year, especially amid possible mass layoffs amid the global recession.

US: Workers' protest shows signs of life

Marick Masters, Professor of Business and Adjunct Professor of Political Science, Wayne State University

More American workers have been organizing and joining the picket line in 2022 to demand better wages and improved working conditions. This has aroused a certain optimism among union leaders and defenders of workers' rights, believing that they are witnessing a turning point in the balance of power in the world of work.

Teachers, journalists and baristas are among the tens of thousands of workers who have gone on strike. It took a vote of Congress to stop 115,000 railroad workers from walking out as well. In total, there were at least 20 major work stoppages each involving more than 1,000 workers in 2022, compared to 16 in 2021, in addition to hundreds of smaller ones.

Workers at Starbucks, Amazon, Apple and dozens of other companies also filed more than 2,000 demands to form unions during the year – a record since 2015. Workers won 76% of the 1,363 elections that took place.

Historically, however, these numbers remain tepid. The number of major work stoppages has been plummeting for decades: it stood at almost 200 in 1980. In 2021, the unionization rate, 10.3%, was not far from the lowest on record . In the 1950s, more than one in three workers was a union member.

The environment is still very unfavorable to unions, with timid labor law and very few employers showing any real receptivity to the idea of ​​having a unionized workforce. Unions find themselves limited in their ability to change public policy. Labor law reform through legislation remains vague, and the results of the 2022 midterm elections are unlikely to help matters.

Nevertheless, public support for unions is at its highest level since 1965, with 71% of citizens saying they approve of union action, according to an August Gallup poll. And the workers themselves are showing more and more interest in joining them. In 2017, 48% of workers polled said they would vote in union elections, up from 32% in 1995, the last time the question was asked.

Future successes may hinge on the unions' ability to capitalize on their growing popularity and ride the wave of recent victories in establishing union representation at Starbucks and Amazon, as well as the success of the "Fight for $15,” which since 2012 has helped pass $15 minimum wage laws in a dozen states and Washington DC. The chances of achieving this are perhaps great: there are in any case opportunities to germinate.

Spain: uneven aid measures could cause problems

Rubén Garrido-Yserte, Director of the Instituto Universitario de Análisis Económico y Social, Universidad de Alcalá

Global inflation is causing the global economy to slow and interest rates to rise to levels not seen since before 2008. Interest rates will continue to rise in 2023, particularly affecting economies as indebted as India. Spain.

It will undermine both the disposable income of families and the profitability of businesses (especially small ones), while making it more expensive to pay down public debt. At the same time, we should see a sustained increase in the cost of the household basket in the medium term.

So far, government actions have partially mitigated this loss of purchasing power. Spain has capped electricity prices, subsidized fuel and made public transport free for city dwellers and commuters.

Agreements have been made with banks to refinance the mortgages of the most vulnerable families. In addition, public sector pensions and salaries have been increased and there are plans to raise the minimum wage.

However, many of these measures must necessarily be temporary. The danger is that they end up being seen as rights that should not be given up. They also distort the economy and create equity issues by excluding or insufficiently supporting certain groups. Private wages will not increase enough to cover inflation, for example.

The action has been such that there has been very little industrial action in response to the cost of living crisis. The danger is that they create a scenario where today's calm may be the harbinger of a social storm tomorrow.

BEHIND THE WAR BALLS ARE PLAYED

FIRST POWER ISSUES

BETWEEN CHINA AND THE UNITED STATES

Nearly a week after a US fighter jet shot down a Chinese spy balloon over the Atlantic, a new flying object was shot down on Sunday, February 12, 2023. The Pentagon said on Sunday that US and Canadians were planning an operation to try to recover the fourth object.

The first three craft were shot down by US F-22 fighters using AIM-9X missiles, authorities said. The first flying object was a Chinese balloon, about 60 meters high, and "carrying a kind of huge basket weighing more than a ton", according to the Pentagon.

Its size would be comparable to that of three buses. A senior US State Department official said the device had "numerous antennae, an array likely capable of collecting and geolocating communications" , and was "fitted with solar panels large enough to provide the energy required to operate multiple sensors collecting intelligence," the Pentagon said in a press release.

On Monday, February 13, 2023, it is China's turn to accuse the United States of flying balloons "illegally" in its airspace. "Since last year alone, American balloons have flown over China more than 10 times without any permission," Chinese diplomatic spokesman Wang Wenbin told reporters. Washington quickly dismissed Beijing's accusations. China also announced on Sunday February 12, 2023 that it had spotted, in turn, a suspicious balloon off its coast.

High-altitude spy episode ?

For Washington, there is no doubt that these are Chinese spy balloons, which entered American territory several days ago. Beijing replies that these are civil aircraft used for research purposes, mainly meteorological. Still, the debris of its various downed objects will be analyzed.

An official of the FBI, the agency responsible for examining them, has also recently indicated that only a “small part” of the surveillance equipment from the first balloon had been recovered. They are being examined at federal police labs in Quantico, Va., he added.

Possible link with tensions around Taiwan

According to specialists, American and Canadian intelligence continuously receive huge amounts of data and are particularly on the lookout for potential missiles, not slow objects like balloons.

US Deputy Defense Secretary Melissa Dalton said on Sunday that after the Chinese balloon was detected, the US air defense adjusted its radar systems to be able to detect smaller, slower-moving objects.

The United States believes the balloon was controlled by the Chinese military and was part of a fleet sent by Beijing over more than 40 countries on five continents for espionage purposes. For some analysts, this could be the start of a major Chinese spy operation to map out foreign military capabilities, ahead of a possible rise in tensions around Taiwan in the years to come.

A real high-flying spy mission, as assured in the press by American officials, or a simple scientific balloon tossed about by the winds ?

Beyond the exchange of arms between the two countries, the incident reminds us that these machines, used for more than fifty years to carry out atmospheric measurements (ozone, CO2, methane, etc.), can also respond to less innocent uses. .

Today's stratospheric balloons are very efficient: they evolve between 18 and 40 kilometers in altitude and the diameter of the largest can reach 130 meters, for a volume of 800,000 m3.

The largest balloons today are capable of carrying a ton of payload. As for autonomy, it can be pushed up to about three months. Ideal for carrying out scientific measurements, but also monitoring operations…

A fierce race for technological innovation

But the most important point according to the Wall Street Journal is that it is not just a question of unidentified flying objects but above all a new stage in the rivalry between the United States and China.

A growing rivalry: the Wall Street Journal recalls that last Friday, the United States Department of Commerce added new Chinese companies to the list of groups with which American companies are no longer allowed to trade.

Washington is thus trying to set up a glacis to hinder the technological development of China. In addition to the measures taken against Huawei and other major Chinese companies, the United States imposed in November 2022 drastic restrictions on the export of advanced semiconductors, in the name of “national security”.

Unprecedented measures which "aim to block the entire Chinese innovation system" and whose consequences - still hard to assess - could be heavy for Xi Jinping, who shows his desire to raise his country to the first place of world powers in all fields by 2049 - the year of the centenary of the seizure of power by the Communists - particularly in tech, a sector at the heart of American ambitions.

So what is trade warfare or espionage ?

"There is a gray area between the two, analyzes Marc Julienne in the article by our colleague Shirley Sitbon. For the Americans, preventing the Chinese from progressing technologically is a question of security".

A vagueness also maintained by the Chinese system, where the links between the government and private companies are sometimes difficult to determine as they can be intertwined in one way or another.

This balloon war only revives the strong tensions between these two rival powers that are the United States and China for a world first place...

HOW EUROPE WANTS TO SAVE

ITS INDUSTRY FACING THE AMERICAN THREAT ?

“Equal treatment” internationally

What we want is to ensure equal treatment internationally, said Ursula von der Leyen, as the United States has provided $500 billion in subsidies and tax breaks over a decade for its technologies " own".

The proposals made by its president, Ursula von der Leyen, aim in particular to respond to the Inflation Reduction Act, the 430 billion dollar investment and subsidy program adopted by the United States to help American companies.

The goal of the European executive is simple: avoid mass relocations and invest in energy transition.

"We have a unique opportunity to lead the way with speed, ambition and determination, to secure the lead of EU industry in the zero-carbon technology sector", explained Ursula von der Leyen to the press.

The avenues put forward by the Commission will be discussed by the European Parliament, as well as by the 27 Heads of State and Government of the EU during a special Council scheduled for Brussels on 9 and 10 February. The debates promise to be tense, with some countries already rejecting the idea of ​​relaxing the rules surrounding state subsidies.

Temporary relaxation of state aid rules for companies

The European Commission wants to introduce a "temporary crisis and transition framework" 2025, to relax the rules on state aid, i.e. subsidies granted by national governments to companies.

This mechanism will make it possible in particular to simplify the procedures, which are now rigid, for renewable technology projects, but also to grant higher subsidies to align with aid received "by competitors located outside the EU". , in this case in the United States.

The European executive also wants to allow member states to grant tax benefits to what it calls "strategic zero-emission sectors", a direct response to the American plan.

These proposals worry some Member States, which have fewer resources. They fear a questioning of the functioning of the single European market, with massive subsidies from France and Germany to their companies.

"The single market is the key to our competitiveness, and whatever we do, we must avoid a subsidy race," said Margrethe Vestager, Vice-President of the Commission.

The exchanges promise to be nourished in particular on the other main axis of the Green Pact, the easing of state aid.

The Commission is indeed making in-depth changes, while shielding its system so as not to disadvantage the less wealthy States.

Use of existing funds by directing them...

On the very sensitive issue of financing, rather than launching new instruments, already a subject of controversy between Member States, Brussels wants to mobilize existing funds from the RepowerEU, InvestEU programs or even the innovation fund. In total, 390 billion euros are available.

In the longer term, other funding will be needed. This is why Brussels has launched the idea of ​​a sovereignty fund to finance innovative sectors, also far from achieving unanimity among the Member States, and which should see the light of day by the summer. .

"The sovereignty fund must preserve cohesion and the single market against the risks caused by an unequal availability of state aid", justified Valdis Dombrowskis, the European Commissioner for Trade.

The Commission remains vague on the contours of this fund, but explains that it could be discussed during the debates on the EU budget, scheduled for summer 2023. Some hope that the mechanism will be built according to the model of the plan European Recovery Plan, which allowed the EU to borrow money on its behalf.

A prospect that does not please some countries, such as the Netherlands or Germany. “I am not sure that we need such an instrument,” reacted German Finance Minister Christian Lindner on Monday, reports the Politico site.

"There is little chance that the February summit will lead to an agreement on financing", say European sources, the spirits not being yet ripe, despite the urgency of the situation.

STRIKE IN FRANCE STRIKE ARM BETWEEN UNIONS AND GOVERNMENT FOR PENSION REFORM

On the one hand, the various ministers, Elisabeth Borne in the lead, have multiplied public interventions in recent weeks to justify this reform as a budgetary imperative, while the seconds have repeated their opposition to any postponement of the age. retirement age, finally scheduled for 64 years by 2030.

Under these conditions, the calls for the “mobilization” of the employees became more and more insistent, with the first days of action being to be expected from the week of January 16th. What to expect from the coming social conflict?

A million protesters

Large processions took place Thursday throughout France to challenge the government's pension reform project while strongly followed strike calls disrupted public transport in particular. According to a police source, the million demonstrators in France will be exceeded

A police source said that the million demonstrators in France will be exceeded, while the official count of the authorities will be given at the end of the day this Thursday.

The CGT announces 400,000 demonstrators mobilized against the pension reform in Paris this Thursday. As a reminder, during the demonstration of December 5, 2019, the first day of mobilization against the previous reform, the union counted 250,000 people.

“Fair and responsible” reform

The President of the Republic was questioned from Spain this Thursday, January 19, 2023 on the January 19 strike against the pension reform. “It is a reform that was democratically presented during the presidential election and the legislative elections. It has been studied with the trade unions and has been validated by the government. It is a fair and responsible reform. France is a little out of step with other countries on the subject and if we want to be fair between the generations, we must carry out this reform”.

Emmanuel Macron had been questioned specifically on the question of a referendum after the announced success of the demonstrations on January 19. He did not answer this question, contenting himself with specifying that the “reform will be done”, in a “spirit of dialogue but with responsibility”.

The Head of State considered it "good and legitimate that all opinions can be expressed" but called for calm demonstrations. “I trust the organizers of these demonstrations so that this legitimate expression of disagreement can be done without creating too much inconvenience for all of our compatriots and obviously without overflow or violence or degradation”, he added.

A united trade union front

Over the years, recourse to strikes has thus tended to refocus on an increasingly small core of employees, in the public services or in certain industrial sectors, while it is reduced to the bare minimum in large fractions world of work, particularly in the service professions and in small and medium-sized enterprises. The last major interprofessional mobilization of the winter of 2019-2020, largely supported by public transport agents, highlighted this well. A resurgence of the wage dispute

Despite its weakening, trade unionism remains an essential player in social conflict. At least for the moment, the conflict that is opening up brings together – for the first time since 2010 – all the trade unions, already burned by the unemployment insurance reform and whose activists overwhelmingly reject any idea of extension of working time. For the first time in 12 years, therefore, the eight main unions called with one voice on the French to take to the streets.

Pensions and the issue of union repoliticization

Thus the pension reform places the trade unions on a crest line, enjoining them to take up a double challenge of magnitude. On the one hand, that of taking advantage of an exceptional unitary framework to build the broadest and most lasting mobilization possible, taking into account the fragmentation of the world of work and going beyond days of action without a future .

On the other, that of reinstating the refusal of reform, massive and inseparable among the opinion of a general opposition to government policy.

DESPITE DONALD TRUMP'S APPEAL

REPUBLICANS STILL HAVE NOT ELECTED

THEIR SPEAKER

Republican Kevin McCarthy, favorite to replace Nancy Pelosi in this position, was still clinging to his candidacy at the start of a fourth day of negotiations. The debates must resume at 12:00 p.m. (5:00 p.m. GMT) in the hemicycle of the House of Representatives.

The first eleven rounds of voting have indeed ended in as many failures: while Kevin McCarthy needs 218 votes to be elected, he did not manage to exceed 203 in the best of cases. This blockade by Congress is leading the United States to a "historic impasse", according to the New York Times. A first since 1923, when it took nine ballots in the House to elect a president.

"Extreme Fringe"

The Congress is completely paralyzed by the revolt of about twenty elected Trumpists, who are blocking the election of a "speaker". "They are blocking because they are part of the Freedom Caucus (the most conservative and far-right electoral committee of the Republican Party, editor's note) and they consider Kevin McCarthy too moderate", explains Anne Deysine, university professor and author of The United States and Democracy (ed. L'Harmattan, 2019).

Kevin McCarthy has yet reached out to the free electrons blocking his election, offering them sizeable concessions in behind-the-scenes negotiations. In vain.

The justifications are not lacking to block Kevin McCarthy. “We should not take it personally, but the future of our country depends on it”, assured, during the debates, the representative of Texas, the trumpist Chip Roy.

Kevin McCarthy has been a member of the Republican staff for more than ten years, a status denounced by the most conservatives in his party, for whom Kevin McCarthy is not a 'real' conservative, but is part of the system.

Above all, these conservative representatives are in a position of strength because they benefit from the very thin Republican majority won in the mid-term elections – 222 seats in the House of Representatives, the majority being at 218. It is therefore enough that five of them continue in their refusal to choose Kevin McCarthy for the block to continue.

Third most important figure in American politics after the president and the vice-president, the "speaker" needs a majority of 218 votes to be elected. Mr McCarthy was currently capping at 201.

But how long will his candidacy remain viable ?

A member of the Republican staff for more than ten years, the elected official does not currently have a credible competitor. Only the name of group leader Steve Scalise is circulating as a possible alternative, without his chances seeming serious.

What is generally only a matter of a few hours could extend over several weeks: in 1856, the elected members of Congress only agreed after two months and 133 turns.

The annoyance was also palpable in the members of the "Grand Old Party", who largely support the candidacy of Kevin McCarthy, giving rise to very lively debates in the hemicycle. The Republican leadership also knows that it cannot afford to go overboard and alienate moderate Republicans.

Former President Donald Trump himself, on Wednesday morning, called on his social network to do everything to "avoid an embarrassing defeat": "Now is the time for our great elected Republicans in the House to vote for Kevin" McCarthy, who will do "a good job, and maybe even a great job".

Very concrete repercussions

This blocking has very concrete repercussions: without a "speaker", elected officials can neither take an oath nor therefore vote on a bill. But the 434 members of the House of Representatives, the scene of this singular spectacle, will continue to vote until a president is elected.

The occasion also, for the Democrats, to denounce the stranglehold of the faithful of Donald Trump - many of whom still refuse to recognize his defeat in 2020 - on the Republican Party, two years after the attack led by his supporters against the seat of Congress. .

“The chaos in the House of Representatives is just another illustration of how an extreme fringe (…) prevents them from governing,” assured the leader of the Democrats in the Senate, Chuck Schumer. Among the Democrats, the atmosphere is therefore one of unity… and exploitation of the current divisions of the opposing camp.

But Joe Biden's party may show unity around its leader Hakeem Jeffries, but neither does the camp have enough votes to end this paralysis.

BECAUSE OF INFLATION THE SPANISH GOVERNMENT REMOVES VAT ON FOODSTUFFS

Also, the Spanish left-wing government announced on Tuesday, December 27 the abolition of VAT on basic necessities in order to compensate for the sharp rise in prices, as well as aid of 200 euros for the most modest families. . These announcements are part of a new series of measures worth 10 billion euros.

This brings to 45 billion euros the total of the measures taken this year by the government to help Spaniards cope with the explosion of inflation, said Socialist Prime Minister Pedro Sanchez during his last press conference in the year.

These new measures are centered on food products, whose rise over one year reached 15.3% in November.

Aid of 200 euros for certain families

During the next six months, “VAT will drop from 4% to 0% for all basic necessities”, such as bread, milk, cheese, fruit, vegetables or cereals, added Pedro Sanchez.

VAT on oil and pasta will drop from 10% to 5%.

The other shock measure adopted on Tuesday morning during the last Council of Ministers of the year relates to the establishment of a

“aid of 200 euros” for families whose income is less than or equal to 27,000 euros per year, in order to “compensate for the rise in food prices”.

On the other hand, the rebate of 20 centimes per liter of fuel which all motorists currently benefit from will be reserved, from 1 January, for the "sectors most affected" by inflation, namely transporters, farmers, maritime companies and fishermen, said Pedro Sanchez again.

Since the Russian invasion of Ukraine on February 24, the Spanish government has multiplied aid to try to contain inflation, which has exploded throughout Europe.

FRENCH NUCLEAR

ANOTHER DELAY FOR THE FLAMANVILLE EPR

The Flamanville EPR (Manche) will be another six months late before its commissioning, now scheduled for mid-2024, EDF announced this Friday, December 16, 2022, when France is relaunching a program nuclear to ensure its energy transition.

What we know about EPR2 nuclear reactors

The start-up of this reactor, the first of this generation planned on French soil, will thus take place with a total delay of 12 years compared to the initial planning. Two other EPRs are already operating in China and a third in Finland.

These six additional months, which bring the delay to 12 years in relation to the start date initially planned, result in the total cost of the project, under construction since 2007, rising from 12.7 to 13.2 billion euros, i.e. four times the initial budget of 3.3 billion euros.

Necessary revision of “complex” welds

The new delay is due to the necessary revision of treatment procedures for some 150 “complex” welds, within the main secondary circuit of the reactor, explained to the press the director of the Flamanville 3 project, Alain Morvan.

The problem appeared this summer, when it was necessary to carry out the heat treatment of "stress relief" of these welds: the process used revealed a "non-conformity of behavior" of sensitive materials nearby, affected by too high temperatures.

How the nuclear lobby is trying to win the battle of ideas

“We had valve temperature behavior that did not conform to what was expected,” explained Alain Morvan, hence the resumption of “studies to define a method (…) making it possible to guarantee the correct level of achievement of these heat treatments”.

These modifications "have been presented to Bureau Veritas, which analyzes them, and by the end of the year we will have the authorization to resume the so-called complex heat treatments", assured the project director.

Another shutdown planned by the end of 2024

These operations should therefore be able to resume at the start of 2023, but the entire project schedule is upset, with fuel loading now announced for the 1st quarter of 2024. The reactor will send its first electrons when it has reached nearly 25% of its power. , "about three months later", so by mid-2024.

Flamanville EPR: "We can imagine the possibility of sabotage"

The additional 500 million euros announced this Friday are mainly related to the maintenance of personnel and subcontracting companies on site.

In addition to these technical hazards, a shutdown of the reactor is already planned to change, by the end of 2024, the lid of its tank which presents anomalies, recalled Alain Morvan.

However, "the Flamanville EPR has taken new strategic steps in recent months, in its pre-operation phase", welcomes EDF in a press release, citing the resumption of certain welds or the testing of electrical equipment.

Macron announced the order of six or even 14 new EPRs

Since 2007, the site of this reactor, designed to offer increased power and safety, has been accumulating disappointments, whether it be anomalies on the steel of the lid and bottom of the vessel or welding problems.

The latest come as Emmanuel Macron announced the order of six or even 14 new EPRs and that Parliament must decide on France's energy model.

In the absence of the Flamanville EPR next year, France should therefore once again face tensions over its electricity supply during the winter of 2023-24.

The current winter gives a taste of these tensions, with Friday, December 16, 2022, 41 reactors in operation only out of 56.

TWITTER MAKES ITS PAID OFFER IN THE NAME OF FREEDOM OF EXPRESSION

Shortly after the takeover by Elon Musk, the social network had implemented a first version which made it possible to obtain the little blue tick formerly reserved for personalities such as journalists or politicians. Many fake accounts had then emerged and the company had to remove the option.

"Twitter Blue" at $8 per month.

The novelty is that with this redesign of Twitter Blue, anyone who subscribes to it can now obtain certification. The latter will however be granted “after verification”, specifies the group, and will adopt during the week a color code: gold for companies and gray for governmental organizations, in accordance with what Mr. Musk had announced at the end. of the month of November.

"Extended verification will democratize journalism and empower the people," he tweeted on Sunday.

In addition to the badge, subscribers to Twitter Blue will be able, with this new offer, to have access to the function allowing to correct tweets after their publication or to that allowing to download videos of better quality.

Extension of the Community Notes program

Besides the imminent launch of Twitter Blue, the platform also announced the extension of Community Notes to all of its users worldwide. Launched in 2021 and formerly known as Birdwatch, this program aims to improve content moderation by adopting a collaborative approach: moderators who are part of it have the possibility of adding context, in the form of publicly visible notes, to tweets which may lend themselves to confusing or spreading misinformation. Other network users can then rate these ratings based on their usefulness.

Until now, only users from the United States had the possibility to see these contextual elements in their feed and to request to become a moderator. This program is now intended to be extended everywhere but gradually, “country by country”, specified the company on the official account of the Community Notes program.

Tweets of 4,000 characters

Other changes to come have also been announced in recent days by the new boss of the social network. the businessman claimed that a limit of 4,000 signs was now being considered instead of the initial 280. The boss of the company also assured that his teams were currently working on a feature allowing Internet users to know if their account is subject to shadow banning from Twitter, that is to say a voluntary reduction. their visibility through the platform.

Avoid misinformation or calls for violence

Freedom of expression as the keystone of Twitter is therefore one of the fundamental pillars of democracy. However Elon Trust also knows not only that Twitter will remain subject to national laws but that it will have to introduce another limiting factor by admitting that speech should be free there "as much as reasonably possible"... A strong desire to avoid the danger of misinformation or calls for violence that can circulate with such speed and ease.

Opposed to the banning of accounts – Elon Musk has also recently authorized the return of tens of thousands of people who had been excluded from the platform – the libertarian entrepreneur wishes to further promote the “de-amplification” of people violating the rules of the social network while making the decision-making process transparent.

“Twitter must become by far the most trusted source of news in the world. This is our mission. “, assures Elon Musk in his revolutionary project and his will to break in the name of freedom of expression.

“And to do that, I will let anyone give me money to appear as a legitimate source of information, instead of ensuring that all legitimate sources of information are properly authenticated,” one user responded. .

"You illustrate the problem," retorted Elon Musk.

"Journalists who think they are the only legitimate source of information, that's the big lie." Or against good thinking.....

RUSSIAN OIL PRICE CAP OR DOUBLE-EDGED SANCTIONS

FOR WESTERN PEOPLE

This agreement prohibits companies from the signatory countries from providing services allowing the maritime transport (freight, insurance, etc.) of Russian oil, unless the price of the latter is less than or equal to 60 dollars per barrel. However, the G7 countries host the main shipping and insurance companies in the world (mainly in Greece and the United Kingdom), which therefore provides them with a credible deterrent power.

The stated desire is to deprive Russia, the world's second largest exporter of crude oil, of the means to finance its war in Ukraine. The country has indeed drawn 67 billion euros from its oil sales to the EU since the start of the conflict, for an annual military budget of around 60 billion euros, recalls Phuc-Vinh Nguyen, expert in energy issues at the Jacques-Delors Institute.

The caution displayed by OPEC+

These measures taken by the developed economies are bringing the world oil market into an unprecedented situation, the consequences of which are difficult to measure. Cautious, OPEC+ decided on Sunday to stick to the status quo while saying it was ready to act quickly if necessary.

Since Monday, Russia must therefore find an outlet at 1.1 million barrels per day, to compensate for the cessation of its crude exports to the European Union.

.Caution prevailed this Sunday after the OPEC+ meeting, a few hours before the application of the embargo by European Union countries on their imports of Russian crude (some countries such as Hungary in are exempt). This is doubled by the imposition of a ceiling price per barrel of Russian crude sold on the international market, decided by the G7 countries to which Australia has joined.

The partnership formed by OPEC and a dozen other black gold exporting countries, including Russia, prefers to wait to find out how the world oil market will react and evolve. Indeed, it is an unprecedented situation, with the possible imputation of the production of one of the major players on the planet. In 2021, Russia exported 8.23 ​​million barrels per day (mb/d), or 12.3% of the volume of oil sold internationally, according to the BP Statistical Review. In October, its exports had fallen to 7.7 mb/d.

China's sluggish demand

Eventually, rumors emanating from the cartel suggesting an increase in production to compensate for the loss of Russian volumes or a decrease to compensate for a drop in prices due to sluggish demand from China will not have materialized. The members of the organization stick to the decision taken in October to reduce from November their quota of 2 mb/d, but are ready "to meet at any time and if necessary take immediate measures to deal with to the evolution of the market and to ensure its stability", indicates the press release.

For their part, the developed economies, led by the United States, want to reduce Moscow's income but also avoid soaring oil prices, which have contributed to driving up inflation for months around the world to levels that we hadn't seen since the 1970s. In theory, it makes sense. Already, Russian crude exports have fallen from 2.4 mb/d in January to 1.5 mb/d in October. For the moment, Russia has compensated for these market share losses in Europe by selling its crude at a discount to China and India. The latter, which bought only 100,000 b/d in January, imported 10 times more in October, at 1.1 mb/d. For its part, China went from 1.6 mb/d to 1.9 mb/d in October. It is unlikely that these two countries will be able to absorb from this Monday the purchase of a volume of 1.1 mb/d, estimated by the IEA. Especially since the recovery of the economy in China, the world's largest oil importer, is not expected before the end of the first half of 2023, due to the Covid-19 pandemic and its strict "zero Covid” which limits activity. Chinese demand has already fallen by 4% in 2022 compared to 2021.

European refiners must find new suppliers

However, if the Russians have a problem of outlets, the European refiners must find an alternative. If they can do this with Gulf countries and African countries, they run the significant risk of buying Russian crude through intermediaries.

The European Commission is aware of this. It has also prepared measures aimed at sanctioning countries that circumvent the European embargo. A thinly veiled threat to Turkey, suspected of having set up a circuitous route to transport Russian crude to European countries. But private intermediaries might be tempted to do so. Freightwaves, a shipping news agency, cites a report by shipping trader BRS, which states that "there are today 1,027 tankers in a 'ghost fleet' operating to transport oil from Venezuela, Iran and Russia”. More than half (503) are high tonnage ships, some of which have been sold since the invasion of Ukraine to small shipping companies,

In the meantime, what will dictate the reaction of players in the oil market will again be the price. This is obvious for OPEC+. Oil prices have lost some 8% over the past month, but they are still more than 21% higher than their levels of a year ago. On Friday, the barrel of WTI fluctuated around 80 dollars and that of Brent around 85 dollars. Without saying it formally, the equilibrium price for the cartel is around 90 dollars.

But the choice of Europeans to accept a ceiling price of 60 dollars, and not 30 dollars, should only have a limited impact. The price of Russia's best-selling quality crude, the Urals, stood at $69.45 on Friday, just 1% below its price a year ago. But Russia is already trading this crude at a discounted price to its extra-European customers, between 48 and 50 dollars, according to Argus Media, a firm specializing in commodity prices. Europeans' acceptance of a ceiling of $60 has also angered Ukrainian President Volodymyr Zelensky, for whom such a price "is completely comfortable for the budget of the terrorist state", he said. he commented on Saturday, according to the services of the presidency.

Unnecessary penalty ?

Russian Deputy Prime Minister Alexander Novak said on Sunday that the West's move constituted gross interference that contradicted free trade rules and would destabilize global energy markets by causing a supply shortage. "We will sell oil and petroleum products only to countries that will work with us on market terms, even if we have to cut production a bit," he added.

The Kremlin has warned that it will no longer deliver oil to countries that support the mechanism, a position reaffirmed on Sunday by Russian Deputy Prime Minister in charge of Energy, Alexander Novak.

This puts some nations “in a very uncomfortable position: choosing between losing access to cheap Russian crude or exposing themselves to sanctions”, explains Craig Erlam, analyst at Oanda, a site specializing in asset trading. What, also, for Greek shipowners and British insurance companies in particular, to lose markets to the benefit of new competitors who do not submit to restrictive measures. Insurers or carriers could emerge elsewhere.

We find the same risk, particularly in the insurance sector, the development of a maritime freight activity being, by nature, “longer”. The negative effect would then be twofold for the G7 countries: not only would their companies lose markets, but the effect of the sanctions would be mitigated.

Quoted by the Russian press agencies, Alexandre Novak. even claimed that Russia was working “on mechanisms to prohibit the use of the capping tool, whatever the level set”, which is likened by several members of OPEC + to a manipulation of the prices of the oil. barrel.

Moscow also has the option of refusing to sell refined products (gasoline, diesel, diesel, etc.) to European countries, whose embargo will not officially apply until February 5, which could cause a spike in prices of these products already energized.

Since the beginning of his offensive in Ukraine, Vladimir Putin has claimed that the United States and its allies have been waging an economic war against Russia by applying the toughest sanctions in modern history.

Russia may still have enough tankers to ship most of its oil without Western restrictions, industry players and a U.S. official told Reuters in October, pointing to the plan's limitations. Western countries, yet the most successful in limiting Moscow's war revenues.

THE CAMOUFLET TAKEN BY EMMANUEL MACRON FACING JOE BIDEN'S INFLATION REDUCTION ACT

Presented as a celebration of the "deep" relationship between two allies, the state visit, explains Chris Coons, an influential senator close to Joe Biden, of Emmanuel Macron in the United States will not produce a miracle for European industrialists, penalized by a US climate law. Focused mainly on climate and social spending, the plan, dubbed the “Inflation Reduction Act” (IRA), provides for more than $430 billion in investment, including $370 billion to reduce greenhouse gas emissions by 40%. by 2030, the largest effort ever made by the United States in this area.

On the first day of a state visit celebrating Franco-American friendship, the French president nevertheless called for "trying together to live up to what history has sealed between us, an alliance stronger than everything", considering that his second state visit to the United States in four years "also showed the strength, the link between the United States and France".

The IRA or "the United States looks first to the United States"

But he again warned his ally: "the risk is that, faced with the challenges of the time, the United States will first look at the United States, that's normal (...) and then look at the rivalry with China, and, in a way, that Europe and France become a sort of adjustment variable” between the two leading world powers.

In a speech to the French community at the French Embassy in Washington, French President Emmanuel Macron warned the United States on Wednesday that their $430 billion investment and subsidy program to help their businesses and fight against inflation risked "fragmenting the West".

He also warned against the "risk" that "Europe and France become a kind of adjustment variable" of the rivalry between the United States and China, the two leading world powers.

The French president told his compatriots at the embassy that he "said with great frankness, friendship (to the American elected officials) (...) that what has happened in recent months is a challenge for us because 'we are starting to shift our focus on energy issues and the cost of the war (in Ukraine) is not the same in Europe and the United States'. "But above all, the choices made, whose objectives I share, in particular the Inflation Reduction Act (IRA, a program of environmental and social reforms and investments for American companies) are choices that will fragment the West" , lamented the French president.

For Emmanuel Macron, the IRA “creates such differences between the United States of America and Europe that those who work in many companies will just say to themselves + we are no longer making investments on the other side of the Atlantic Ocean. »

During this lunch with American parliamentarians, he denounced the “super aggressive” measures taken by Democratic President Joe Biden to boost American industry, pleading for better economic coordination on both sides of the Atlantic.

Yet the hope of French President Emmanuel Macron to obtain exemptions for European manufacturers, penalized by the "Inflation Reduction Act", Joe Biden's great climate law which gives preference to American car manufacturers, has been radically showered. by Joe Biden himself. This is THE current point of tension between the two countries, and the subject that came up the most during this conference: the American industrial program, the “Inflation Reduction Act”, deemed too protectionist by Paris.

“The United States will never apologize for the plan we are going to put in place”

There is no development in sight for the US aid package even though US and French Presidents Joe Biden and Emmanuel Macron sought on Thursday to play down trade tensions between the European Union and the United States by saying want to "synchronize" their approaches in terms of green industry and avoid competition for jobs.

However, there is little chance that Washington will alter the Inflation Reduction Act, this 430 billion dollar investment program launched to help its American companies.

“We have the same objective: to invest massively in clean energies. Our teams will continue to talk to each other, to coordinate us”, tried to reassure Joe Biden. While being very clear: “The United States will never apologize for the plan that we are going to put in place”, did he -he adds,

As part of the Inflation Reduction Act, the largest clean energy transition investment in U.S. history was passed and with full force by the Biden administration A great victory and achievement for Biden therefore on which he will be judged in the next presidential election. Wanting to revitalize his industry and reassure a middle class shaken by globalization, while standing up to Beijing, the American Democratic President has voted this gigantic investment program, the IRA which worries Europeans.

The text rightly panics the European Union, which fears a massive industrial exodus across the Atlantic. And for good reason, the economic fabric of the Old Continent, which is already suffering from the gas crisis, risks suffering a little more, in the absence of equivalent subsidies.

“For me, the right policy in this matter is to seek European consensus first and then talk to the Americans from a common front. It is obvious that France does not have sufficient weight to influence American decisions. The French economy represents 2% of global GDP while the United States is around 20%. It's as if we were asking the question of whether Belgium (0.5% of world GDP) could influence the decisions of France. Very generally, in the national debate, we are particularly interested in the position of Germany and possibly Italy.

I rarely see the Belgian positions debated in France. “You have to be aware that seen from Washington, our country is a secondary player on the European scene. The Germans dominate. And on the global aspect, the French state is not at the same level as China with the Americans. So the right level to fight American protectionism is to bring this subject to the European level. “, concludes Gilles Babinet co-president of the National Digital Council, questioned by a colleague from Atlantico.

"Once again, we are not in a partnership of equals. The French state must agree to pursue a policy of middle power.", he concedes.

McKINSEY MACRON CASE ON THE SPOT ?

Last Friday, Emmanuel Macron, for his part, considered that he was not at the “heart of the investigation”, while declaring :

“I have no fear Macron could be summoned at the end of his second term.

The head of state, whose name does not appear in the press release from the prosecution, is protected by his criminal immunity, provided for in article 67 of the Constitution. According to this article of the supreme law, the Head of State "cannot, during his term of office and before any French jurisdiction or administrative authority, be required to testify or be the subject of an action, an act information, instruction or prosecution".

If the investigating magistrates were to consider that Emmanuel Macron must explain himself on these questions, they could summon him at the end of his second term at the Élysée, and only on the acts which were not committed in the exercise of his duties as President.

Ironically:

Emmanuel Macron is a child of the PNF. Without the intervention of the National Financial Prosecutor's Office in the 2017 electoral campaign and the questioning of François Fillon suddenly caught up in the alleged fictitious job of his wife, would the current president have found the keys to the Elysée ? .

During the 2022 presidential election, in the midst of controversy, Emmanuel Macron had estimated that the non-payment of corporate tax by McKinsey was explained by the tax rules in force. "If there is evidence of manipulation, let it go to the criminal court," he said.

The chairman of the Senate commission of inquiry, Arnaud Bazin, and the rapporteur Éliane Assassi indicated for their part that they had "full confidence in the justice system to conduct this investigation". “Full light must be shed on this affair, which is of major importance for our democratic life. »

They recalled that the Senate had unanimously adopted in mid-October a bill which aims to better regulate the services of consulting firms, but which must still be placed on the agenda of the Assembly.

Justice is however interested in the very close relations between the head of state and McKinsey.

"This is the first time that the PNF has opened an investigation against a President of the Republic in office... after having done so against his Secretary General, Alexis Kohler, and his Minister of Justice", recalls a journalist.

FRANCE UNEMPLOYMENT INSURANCE

 AND THE PATH TO MODULATION

The senators must ratify at the end of the morning, by a final vote, a compromise found with the deputies on this text, which did not require the government to resort to the constitutional weapon of 49.3 thanks to an agreement reached with the right .

Labor Minister Olivier Dussopt's bill initially plans to extend the current unemployment insurance rules, resulting from a disputed reform of Macron's first five-year term. A decree to this effect was taken in advance at the end of October.

It also triggers the possibility, by decree, of modulating certain rules of unemployment insurance so that it is "stricter when too many jobs are unfilled, more generous when unemployment is high", according to the campaign promise of Emmanuel Macron.

Consultation is underway with the social partners, and the government will announce "the arbitrations adopted" on November 21, for an application of the modulation at the start of 2023. "We are working on a modulation of the maximum duration of compensation", currently 24 to 36 months depending on age, Mr. Dussopt told MPs on Tuesday.

Thus “we do not plan to modify the conditions of affiliation to the unemployment insurance system”. It takes six months of work over a reference period of 24 months to be eligible. The executive insists that there is urgency in the face of the recruitment difficulties of companies, and makes this reform a first stone of its strategy to achieve full employment in 2027, i.e. an unemployment rate of around 5% against 7, 4% currently.

"We did not fold"

Deputies and senators reached a compromise on this text of the law in a joint committee last week, but at the cost of a hardening imposed by the LR senators, to which the minister was initially opposed.

It was added that the refusal twice in one year of a CDI after a CDD or an interim contract on the same post, the same place and with the same remuneration, will lead to the loss of unemployment compensation. It will be up to the employer (or both employers) to inform Pôle emploi, which poses a “technical difficulty” so that it is not a “gas plant”, according to Mr. Dussopt.

"The government did not want it, but we did not bend," said the rapporteur for the text in the Senate Frédérique Puissat (LR). His counterpart in the Assembly Marc Ferracci (Renaissance) finds the measure "little operational and legally fragile", and sees in it "a somewhat ideological approach, even if there is a real subject on the refusal of CDI".

Another provision, added by amendments from the presidential majority and LR deputies, is still debated: “abandonment of post” will now be equated with a resignation, to limit access to unemployment insurance.

Right-wing elected officials “have been force of proposal, both in the Assembly and in the Senate”, welcomes the deputy LR Stéphane Viry, who however believes that the bill “does not exhaust” the reforms to be carried out. In unison with the unions, the left criticizes "a right-wing reform" whose objective would be to "lower unemployment benefits".

Before the final vote Tuesday in the Assembly, acquired by 210 votes against 140, the Insoumis defended in vain a last motion to reject this text bearing, according to them, "a disposable vision of employees". The Socialists have announced a referral to the Constitutional Council. RN deputies also voted against the bill, by which "punishment and guilt are the order of the day", according to them.

The bill also records the opening of a consultation on the governance of unemployment insurance. Another component programs a “drastic simplification” of the validation of acquired experience (VAE), according to Minister Delegate Carole Grandjean.

ELON MUSK WANTS TO REVOLUTIONIZE TWITTER

IN THE NAME OF FREEDOM OF EXPRESSION

On Friday October 28, Elon Musk formalized the news: he took the reins of the social network Twitter, bought for the sum of 44 billion US dollars.

Although Twitter has far fewer users than its competitors such as YouTube, Facebook, Instagram or even TikTok, Twitter is considered a real tool of influence, in particular because of its use by many figures in the political, artistic and media world. . In addition, it is common for the so-called "traditional" media to take up and comment on their own medium what was initially published on the blue bird platform, which increases the perception and reality of its importance for public discourse.

Upon the official takeover, the boss of Tesla and SpaceX indicated that he was acquiring the social network with the aim of revolutionizing Twitter.

" Freedom of speech "

First of all Elon Musk, this “absolutist of freedom of expression”, indicated that freedom of expression becomes the keystone of Twitter. According to him, it exists if “people you don't like are allowed to express ideas you don't like”. On his favorite digital medium, he claims that "the policies of a social media platform are good if the most extreme 10% on the left and right are equally unhappy."

Hence his relatively clear position: he spoke out against permanent suspensions of accounts, saying he preferred those of a temporary nature. In this, it would indeed deviate from the old practice of Twitter, which applies one or the other of these sanctions depending on the seriousness of the facts. One of his very first decisions, therefore, could be to reinstate the account of former US President Donald Trump, suspended for "incitement to violence" after the assault launched on the Capitol on January 6, 2021.

Alone at the helm, the boss of Tesla is already beginning his major overhaul Whoever is working to improve the situation, whether at the banking level (Paypal - when he was its director), at the energy level (Solar City), at the level of the transition to post-oil (Tesla), at the level of access to space (SpaceX), or at the level of Internet access for all (Starlink), explained Sunday wanting to make Twitter “the most trusted source of information on the world ”…

Its hunt for fake accounts and its desire to certify (blue check) users are a step in the right direction.

“More power to the people”

On the social network Twitter, the blue notch of certification can thus be obtained by everyone on the condition of paying a subscription of 8 dollars per month. “Extended Verification for All will democratize journalism and empower the people,” he tweeted on Sunday. “Twitter Blue” at $8 a month.

Until now, only eligible accounts (governments, media, political and cultural personalities, etc.) could indeed obtain the addition of a blue tick to their profile, as a guarantee of authenticity. However, as soon as he acquired Twitter ten days ago, the boss of Tesla launched an overhaul of this system, so that everyone could obtain the famous badge, and other practical tools, by subscribing to "Twitter Blue" to $8 per month.

On the iPhone, the social network's mobile application already mentions the arrival of the new formula, but its launch has been postponed to Wednesday, November 9, the day after the US parliamentary elections, according to the New York Times.

“Power to the people: Your account will receive a blue checkmark, just like the celebrities, businesses and politicians you already follow,” Twitter now promises.

"For the 'people', against the ruling 'elites'..."

According to Barthélémy Michalon, Professor at the Tec de Monterrey (Mexico), the communication of the boss of Twitter around his takeover follows the contours of what characterizes a populist discourse. And he analyzes as follows in the online media TheConversation.

'' Elon Musk has indeed made use of the tool he was about to acquire to directly address the community of users of the platform and collect their opinion on various subjects. While some questions were of a secondary nature (such as the famous "edit button" of a tweet already published), others touched on the very functioning of the platform and its impact on democracy. are reminiscent of the tendency, relatively marked among populist political formations, to call referendums or to promise the organization of them in their electoral programs. These online polls, real challenges launched in the public square to the status quo, also aimed to exert significant pressure on those who were then at the head of Twitter,

Musk went much further in this direction, affirming that the sidelining of the management team in place was an essential condition for the implementation of the major transformations promised on the platform. So he dismissed the main leaders of the platform, including CEO Parag Agrawal According to him, it was this intention that guided his decision to "transform Twitter into a private company" (it was then a "public" company in the Anglo-Saxon sense, because it is listed on the stock exchange), and therefore to take direct control of it. In his purchase offer, he promised bluntly: “I will unlock the potential of Twitter”.

… and in the name of a supposed “general will”

In order to satisfy this “general will”, Musk put on the table a series of proposals to evolve the platform, in particular during a public conversation, held on April 14 in the context of the annual conference of TED. Musk thus proposes to delete automated accounts (bots), (...). It also promises to eliminate fraudulent messages (scams), which aim to deceive their recipients, for economic purposes and/or piracy.''

Avoid misinformation or calls for violence

Freedom of expression as the keystone of Twitter is therefore one of the fundamental pillars of democracy. However Elon Trust also knows not only that Twitter will remain subject to national laws but that it will have to introduce another limiting factor by admitting that speech should be free there "as much as reasonably possible"... A strong desire to avoid the danger of misinformation or calls for violence that can circulate with such speed and ease.

“It is also the fears of companies to advertise on the platform, the possible increase in hate speech or misinformation in the name of the freedom of expression wanted by the new boss. Several groups, including Volkswagen​, General Mills​, Pfizer, have thus paused in their advertising purchases – still looking for an appropriate environment (“Brand Safety”) to promote their brands. General Motors has temporarily suspended its paid ads on Twitter.

Musk's revenge on advertisers

The billionaire, however, seems to have his revenge on the advertisers who have stopped their advertising on the social network. On Tuesday, November 9, 2022, the marketing teams received a document containing a question-and-answer session with employees. To be used in the sales pitch for advertising slots, it is indicated that Twitter welcomes 15 million additional monetizable daily users. In total, the internal memo indicates that the number of accounts that can generate revenue to “exceed a quarter of a billion”. Since the takeover of Elon Musk, the growth of daily active users has grown by more than 20%.

The latest official results from Twitter, in the second quarter, advanced a number of monetizable daily users of 237.8 million and 16.6% growth over the year.

This increase is true everywhere, but “even more in the United States”, specifies the document. An important detail since the American territory concentrates the majority of Twitter users, and therefore of its potential income. And no increase in hate speech would be observed. Despite a spike in hate and racist speech (due to targeted campaigns, assures Twitter), the internal document specifies that messages of this type remain within the historical standards of the platform. These tweets thus represent 0.25% to 0.45% of the hundreds of millions of publications per day.

The Elon Musk effect therefore seems to be verified.

“Twitter must become by far the most trusted source of news in the world. This is our mission. “, assures Elon Musk in his revolutionary project and his will to break in the name of freedom of expression.

“And to do that, I will let anyone give me money to appear as a legitimate source of information, instead of ensuring that all legitimate sources of information are properly authenticated,” one user responded. .

"You illustrate the problem", retorted Elon Musk. "Journalists who think they are the only legitimate source of information, that's the big lie". Or against good thinking...

CONTROL INFLATION A WORRYING UPDATE

At the other end of the spectrum, France and Malta are doing the best. In particular, Malta has still not raised state-regulated energy prices, thus artificially keeping inflation at zero in this area... "Everyone should have around 9% inflation normally, but France is an exception”, observes Éric Heyer, economist and director of the analysis and forecasting department of the OFCE. With an annual inflation rate of 6.7% in August, can we say that France is doing well compared to its German, Spanish, Italian or British neighbors ?

If inflation is lower in France, "it's partly thanks to our energy mix", explains Éric Heyer. Continuing to bet on nuclear allows us in particular to be more independent than our German neighbor who imports a lot more fossil fuels. According to figures from the International Energy Agency, Russian oil accounted for only 17% of black gold imports from France in 2019, compared to 34% for Germany.

The second reason and “the most important”, according to Éric Heyer, are “measures to support households, either with checks or by freezing prices”. Germany, Great Britain and Spain have preferred, by political choice, financial assistance to citizens by distributing vouchers and discounts on fuel, without freezing prices. France preferred to bet big on the tariff shield by freezing gas prices until the end of 2022.. 

“If there was no such protection, the electricity bill would increase in January 2023 by 120 euros per month and the gas bill of 180 euros per month”. In line with remarks made by the Minister of Public Accounts Gabriel Attal, Bruno Le Maire confirmed that all French people would continue to benefit in 2023 from an attenuated form of "tariff shield" on gas and electricity prices. The surge in energy prices should therefore be contained and limited at least until the beginning of 2023 for the French. At the start of 2023, "there will be an increase for everyone in the price of gas and electricity, which will be as contained as possible, to the extent that our public finances allow us", guaranteed the Minister of Economy. 

Since the fall of 2021, the "tariff shield" and government rebates on the price of fuel have cost 24 billion euros, according to a recent figure from Bercy. The surge in energy prices should therefore be contained and limited at least until the beginning of 2023 for the French. At the start of 2023, "there will be an increase for everyone in the price of gas and electricity, which will be as contained as possible, to the extent that our public finances allow us", guaranteed the Minister of Economy. 

Since the fall of 2021, the "tariff shield" and government rebates on the price of fuel have cost 24 billion euros, according to a recent figure from Bercy. The surge in energy prices should therefore be contained and limited at least until the beginning of 2023 for the French. At the start of 2023, "there will be an increase for everyone in the price of gas and electricity, which will be as contained as possible, to the extent that our public finances allow us", guaranteed the Minister of Economy. Since the fall of 2021, the "tariff shield" and government rebates on the price of fuel have cost 24 billion euros, according to a recent figure from Bercy.

The tariff shield as a bandage ?

But for Jean-Marc Daniel, the tariff shield "is an artificial modification of prices, which, in the end, will just be a transfer for future generations". They make it possible to limit inflation “in a limited time” but “the creation of a budget deficit cannot last forever”. And it is obvious for all the specialists, “inflation will rise again when we lift these tariff shields”.

FRANCE

THE SECTION 49.3 CLEAVER FOR THE BUDGET

The ax of 49.3 has been on everyone's mind since the start of the examination of the Finance Bill (PLF) for 2023 in the National Assembly. MPs knew the executive would use it, but were waiting to find out when. Tuesday, October 18, the government spokesman, Olivier Véran, put an end to the suspense:

the use of 49.3 will be "probably for tomorrow", Wednesday, the last day of examination of the expenditure part of the PLF, he assured.

Several Majority heavyweights have been pushing for the 49.3 to be instigated as soon as possible.

"We are the ones in the arena and we don't want to turn ourselves into punching bags. We had pushed for it to go faster, the government has chosen to go all the way", confides a Renaissance leader.

But Elisabeth Borne opted for negotiation before the forced passage. “To find a compromise, it takes two:

the [opposition] group presidents said from the start that they would not vote for the finance bill.

The blockage does not come from us, and you have shown it well”, declared the Prime Minister, Élisabeth Borne, during a meeting, Tuesday morning, with the deputies Renaissance

However, "we must give the debate a chance, especially since the French do not like 49.3 very much. These tools, such as the requisition [in the refineries on strike, editor's note], must be used with caution", has she added.

The 49.3 brandished by the government

Article 49 paragraph 3 of the French Constitution allows the government to have a text adopted without a vote of Parliament. This stipulates:

"The Prime Minister may, after deliberation by the Council of Ministers, engage the government's responsibility before the National Assembly on the vote on a Finance or Social Security Financing bill. In this case, this bill is considered as adopted, unless a motion of censure, tabled within the following twenty-four hours, is voted under the conditions provided for in the preceding paragraph. The Prime Minister may, in addition, have recourse to this procedure for another project or a bill per session."

The government of Elisabeth Borne, which does not have an absolute majority in the National Assembly to vote for its finance bill, can therefore adopt it despite everything by drawing 49.3. This article allows him to adopt his text without going through the vote of the deputies in the National Assembly. The 2023 budget is then examined in the Senate. In the National Assembly, there is nevertheless, for the opposition, a device to thwart the executive: the motion of censure. It allows not only to reject the adoption of the bill, but also to overthrow the government.

Lack of absolute majority

49.3 is a constitutional weapon available to the government which allows a "forced passage" when its majority in the National Assembly is narrow, even relative. Conversely, in the event of an absolute and comfortable majority, there is no need for the government, most of the time, to use 49-3. During Emmanuel Macron's first five-year term (2017-2022), only one use was identified, by Édouard Philippe, in 2020, on pension reform.

The Prime Minister had an absolute majority but the opposition, in particular La France insoumise, had tabled a very large number of amendments with the aim of obstructing the text.

Several amendments, voted against the opinion of the executive, could thus jump. The deputies, including some members of Renaissance, notably approved a tax on super-dividends proposed by the president of the MoDem group, Jean-Paul Mattei. A Republican amendment restoring the "exit tax" was also voted against the government's opinion.

Motion of censure ?

Elisabeth Borne, should be brought to use it regularly. The last legislative elections only gave it a relative majority. It therefore seems unlikely that the Prime Minister will manage to pass all of her bills without a hitch.

Oppositions divided on a motion of censure To be adopted, a motion of censure requires the votes of the majority of the members of the Assembly. With the current composition of the hemicycle, this would amount to an alliance between the party Les Républicains (LR), the National Rally (RN) and the New Popular Ecological and Social Union (Nupes). However, if the RN and the Nupes are going to table a motion of censure, the two groups should stay in their lane and not vote for the provision of the other. If the motion is passed, the text is rejected and the government overthrown, but this scenario seems unlikely.

But nothing indicates that these oppositions could not join forces in the future.

The threat of a motion of censure indeed hovers over the pension reform currently in consultation.

REAL HUMILIATION FOR WESTERN PEOPLE

OPEC DECISION HIGHLIGHTS ALIGNMENT

FROM SAUDI ARABIA TO RUSSIA

The decision by OPEC+ to cut its oil production, while the United States and France demanded an increase, underlines the solidity of the ties forged between Saudi Arabia, leader of the cartel, and Russia.

At the end of September and following the G7, the European Union announced what it believed to be one of the most effective weapons to dry up Moscow's warlike finances while fighting its own energy crisis: a cap on the price of oil. .

A few weeks later it was all over for the West, which saw its plan seriously undermined.

The thirteen members of the Organization of the Petroleum Exporting Countries, led by Saudi Arabia, and their ten partners led by Russia decided this Wednesday, October 5, 2022 on a drop of “two million” barrels per day for the month of November. This drastic cut could cause crude prices to soar to the benefit of producing countries, including Russia, which needs hydrocarbon sales to finance its invasion of Ukraine.

A slap from the Saudi Prince MBS to his Western allies

It is a real slap in the face given by the strongman of Saudi Arabia, Crown Prince Mohammed Ben Salman, to his Western allies. In recent months, Joe Biden and Emmanuel Macron had reconnected with MBS – at the risk of being accused of rehabilitating the one whom the CIA considers responsible for the assassination of the Saudi dissident Jamal Khashoggi. The two leaders are today rejected in their demands.

A few weeks before the inevitably crucial midterm elections, the Biden administration is of course furious: fighting at home against galloping inflation – led in particular by energy prices – it has long pressured its allies within OPEC, starting with Saudi Arabia, so that they do not reduce their production in this way.

Alignment with Russia against “fist bump”

The decision of OPEC + falls to the worst for Joe Biden. In a press release, he said he was "disappointed with the short-sighted decision" of the cartel of black gold producing and exporting countries. “It is clear that with its decision today, OPEC + is aligned with Russia”, then declared, in hardening the tone, its spokeswoman Karine Jean-Pierre.

She thus accuses Mohammed bin Salman, Prime Minister in office, of aligning himself with Russia. It is the entire policy of the Biden administration in the Gulf that is called into question, after a summer visit with meager results that some had described as “humiliating” for the United States. The American president had traveled to Jeddah, Saudi Arabia, in July for an official visit which notably saw him exchange a "fist bump", a familiar greeting fist to fist, with Crown Prince MBS, and participate in a summit. with many Arab leaders... But with this decision on Wednesday, the Saudis made it clear that they didn't care about their relationship with Biden.

Strategic reserves

The 79-year-old Democrat knows that a rise in gas prices a month before the midterm legislative elections would undermine the chances of his party, which so far hopes to retain control of at least one of the two chambers. of Congress, the Senate.

Faced with this economic and electoral risk, the White House is already sketching out its response. In particular, it will “put on the market next month ten million barrels taken from the strategic oil reserves”.

The US executive had already decided in March to use these black gold reserves for several months, now at their lowest since July 1984.

But "the United States cannot forever draw on strategic reserves (...) and OPEC knows it", observes analyst Andy Lipow (Lipow Oil Associates), for whom the solution would be "to produce more oil" on American soil.

This is why Joe Biden also wants to think about the best way to “reduce OPEC+ control over energy prices”, according to the long press release from the White House.

And what about the European Union ?

But the expert points out that "this would penalize the European and Asian allies"...

As usual, the European Union is taken by surprise and may well share its ire. By thus increasing the price of crude, the decision of the oil cartel puts an end to its plan to cap the price of oil. "We are determined to make the Kremlin pay the price of this new escalation", declared Wednesday September 28 the controversial president of the Ursula von der Leyen Commission with an eighth set of sanctions.

However, this cut in world production risks costing Europe and the United States dearly and helping to fill the Kremlin's coffers.

OECD EXPECTS RECESSION

IN EUROPE FOR 2023

And the euro zone occupies a prominent place in this very dark picture: its growth is undergoing the most significant revision of all the regions of the world, forecast at 0.3% – against 1.6% in June. The OECD also anticipates a recession scenario for Germany in 2023, that is to say a period of decline in its economic activity over at least two consecutive quarters. German GDP – the largest European economy – is expected to plunge next year, down 0.7%, while the previous forecast predicted an increase of 1.7%.

“This OECD forecast is realistic. It is consistent to consider that in the Euro Zone, it is probably Germany that will suffer the most this winter from the energy shock”, explains Gustavo Horenstein, economist and fund manager at Dorval Asset Management. “The recession that will affect Berlin is expected because of its dependence on Russian gas and the importance of the manufacturing industry in its GDP – a sector which is very sensitive to questions of energy supply. »

Unlike Berlin, its main European neighbors should escape this prospect: growth of 0.4% is expected in Italy, 1.5% in Spain and 0.6% in France – while Bercy still expects 1% for its 2023 budget. But these OECD forecasts could still be revised downwards depending on the evolution, this winter, of the current energy crisis.

"If it's very cold, stocks will run out faster"

“Significant uncertainties surround these projections”, notes the organization, which points to a risk “of worsening fuel shortages, in particular gas” in the event of a particularly harsh winter. Growth in the euro zone, forecast at 0.3%, could then be further reduced by an additional 1.25 percentage points in this worst-case scenario. This would then have the effect of inevitably plunging the vast majority of countries in the region into recession for the whole of 2023.

The recession in several European countries “will quite simply depend on the temperatures this winter”, according to Gustavo Horenstein. “If it's very cold, stocks will run out faster. The risk is that the demand for gas and electricity for heating is much higher than the production capacities (of these two energies). »

And in a context of already high gas and electricity prices, the risk of shortages exists this winter according to the OECD: “This could happen if additional non-Russian supplies from non-EU countries do not materialize to the extent expected, or if gas demand is exceptionally high due to a severe winter. »

The organization acknowledges that EU gas stocks have been “significantly boosted” this year – between 80% and 90% in most member states – but may prove to be “insufficient”. “A harsh winter could significantly accentuate shortage phenomena,” warns the OECD.

The OECD has established three scenarios relating to the levels of European gas stocks over the winter of 2022-2023.

The international organization for economic studies has also established different scenarios relating to the levels of European gas stocks over the period October 2022 - April 2023. The first assumes a 10% drop in gas consumption , the result of the implementation of energy sobriety plans by several European countries. In this case, stocks would be sufficient for this winter.

In the other two scenarios, the energy situation would become really tense in Europe: in the case of gas consumption similar to the period 2017-2021, there would be an "acute risk of disruption of energy supplies" in February 2023. And for the “harsh winter” scenario, the fall in the level of gas stocks below 30% – corresponding to a normal operating level – would take place in January.

In addition to the winter weather, the "ability of industry in particular, and of European economies in general, to manage their energy consumption will also be important", notes Gustavo Horenstein.

“Probably no improvement before 2024”

The vertiginous rise in energy prices is already threatening the activity of a growing number of energy-intensive industries – some are forced to reduce their activity, like Duralex and others in the steel industry.

“Most governments, when it comes to dealing with energy issues, prioritize households, utilities, hospitals… and productive industry comes last. In the event of a recession, this is probably where there will be the most damage this winter in Europe, ”said Gustavo Horenstein. In the event of an aggravation of the energy crisis, gas and electricity savings could in fact primarily affect industries which, by reducing their production, would have an impact on the economy of the Euro Zone – this sector represented 23% of European GDP in 2021, according to the World Bank.

Whatever measures are taken in the short term, “the reconstruction of the European energy sector will take years”, notes Gustavo Horenstein.

"We will probably go through a difficult time with a strong economic slowdown. The recession and the domestic inflation to fight are in front of us, we will probably not see an improvement before 2024."

WHY FRANCE IS LESS AFFECTED BY INFLATION

THAN OTHER EUROPEAN COUNTRIES

For the rest, it is mainly the countries of Eastern Europe that are suffering from the sharp rise in prices. The rest of Europe is not spared either. In the Netherlands, for example, the rise in prices exceeds 13% over one year. The Dutch government has taken fewer measures than other European executives to support household purchasing power and fight inflation. Still according to Eurostat data for the same period, it is 8.8% in Germany, 10.3% in Spain, 9% in Italy. In Great Britain this rate was 10.1% in July.

At the other end of the spectrum, France and Malta are doing the best. In particular, Malta has still not raised state-regulated energy prices, thus artificially keeping inflation at zero in this area... "Everyone should have around 9% inflation normally, but France is an exception”, observes Éric Heyer, economist and director of the analysis and forecasting department of the OFCE. With an annual inflation rate of 6.7% in August, can we say that France is doing well compared to its German, Spanish, Italian or British neighbors ?

The tariff shield

If inflation is lower in France, "it's partly thanks to our energy mix", explains Éric Heyer. Continuing to bet on nuclear allows us in particular to be more independent than our German neighbor who imports a lot more fossil fuels. According to figures from the International Energy Agency, Russian oil accounted for only 17% of black gold imports from France in 2019, compared to 34% for Germany.

The other reason and “the most important”, according to Éric Heyer, are “the measures to support households, either with checks or by freezing prices”. Germany, Great Britain and Spain have preferred, by political choice, financial assistance to citizens by distributing vouchers and discounts on fuel, without freezing prices. France preferred to bet big on the tariff shield by freezing gas prices until the end of 2022.. “If there was no such protection, the electricity bill would increase in January 2023 by 120 euros per month and the gas bill of 180 euros per month”.

In line with remarks made this weekend by the Minister of Public Accounts Gabriel Attal, Bruno Le Maire confirmed that all French people would continue to benefit in 2023 from an attenuated form of "tariff shield" on gas prices and electricity.

The surge in energy prices should therefore be contained and limited at least until the beginning of 2023 for the French.

At the start of 2023, "there will be an increase for everyone in the price of gas and electricity, which will be as contained as possible, to the extent that our public finances allow us", guaranteed the Minister of Economy. Since the fall of 2021, the "tariff shield" and government rebates on the price of fuel have cost 24 billion euros, according to a recent figure from Bercy, but the specter of yellow vests helping...

The limits of the tariff shield

And yet for Jean-Marc Daniel, the tariff shield "is an artificial modification of prices, which, in the end will be just a transfer for future generations". They make it possible to limit inflation “in a limited time” but “the creation of a budget deficit cannot last forever”. And it is obvious for all the specialists, “inflation will rise again when we lift these tariff shields”.

If the State is coping with the crisis with the means at hand and succeeds in limiting the effects of the drop in purchasing power, it is at the cost of a debt which is accumulating and which we will have to absorb one day or another.

GAS SHORTAGE IN EUROPE ?

RUSSIAN GAZPROM SUSPENDS ITS DELIVERIES

IN FRENCH ENGIE

Suspension of Gazprom deliveries to France for unpaid invoice

And the Russian giant Gazprom, notifying the French group of not having received “in full the financial sums due for deliveries”, announced Tuesday evening the total suspension of its deliveries to the French group Engie from Thursday September 1, 2022.

"Gazprom Export has notified Engie of a complete suspension of gas deliveries from September 1, 2022 until full receipt of the financial sums due for the deliveries", indicated the Russian group in a press release published Tuesday evening on its website. Telegram account.

Under a decree by Russian President Vladimir Putin signed at the end of March, Gazprom specifies that "it is prohibited to deliver more natural gas to a foreign buyer if the buyer has not made payment in full within the set period in the contract”.

Reserve stocks?

French Prime Minister Elisabeth Borne, wanting to “reassure Engie customers”, however said that the French group had “found other sources of supply”, without specifying which ones, in the Daily magazine on the TMC channel.

Deliveries of Russian gas to Engie had already dropped significantly since the start of the conflict in Ukraine, recently dropping to just 1.5 TWh (terawatt-hour) per month, according to Engie. This figure is to be related to “total annual supplies in Europe greater than 400 TWh” for Engie, adds the main gas supplier in France, of which the French State holds nearly 24%.

At the end of July, Engie had assured that it had significantly reduced its “financial and physical exposure to Russian gas”, which already represented only around 4% of its supplies. "It's completely within the margin of the flexibility of our portfolios, so we're not at all worried," said its managing director Catherine MacGregor at the time.

Last Thursday, France's gas stocks exceeded the 90% filling threshold for the winter (91.47% Tuesday morning), according to the European platform Aggregated Gas Storage Inventory (AGSI).

Still, the Europeans are rushing in dispersed order to find gas elsewhere, far from being ready for this challenge that they have imposed on themselves...

Europeans desperate for gas...

To counterbalance the drop in Russian deliveries, the different states of the European Union are indeed negotiating on their own with the gas supplier countries.

Emmanuel Macron's trip to Algeria last week, officially intended to strengthen relations between Paris and Algiers, led to meager negotiations to obtain more gas. .

France is not the first to try to obtain more gas from its Algerian partner. Mario Draghi came to sign a new contract in July for 4 billion m³ of additional gas for Italy. Spain had negotiated Algerian gas a few weeks before. Other European countries have chosen alliances with different partners, such as Norway and the United States. For his part, the German Chancellor, Olaf Scholz, traveled to Canada to sign an agreement on Tuesday night for gas deliveries which will begin around 2025.

A good way for Justin Trudeau's government to count on a reliable partner who will finance its new infrastructures for liquefied natural gas and hydrogen. In addition, some countries find themselves unable to discuss with other gas suppliers for reasons of simple geography. Viktor Orban's Hungary has gone to ask for more gas directly from Moscow, while the new interim government in Bulgaria is tempted to do the same.

In this context of energy crisis, "The Jacques Delors Institute has been pleading for ten years for the creation of a common gas purchasing center at European level", a structure that already exists for uranium, recalls Thomas Pellerin-Carlin .

A difficult solution, however, to put in place insofar as the choice of the energy mix falls within the competence of the States, with very different situations...

A RETURN TO ALL DANGERS

FOR THE FRENCH GOVERNMENT ?

Inflation and purchasing power

In France as in Europe, the economic consequences are heavy, starting with the return of inflation. The vote on the bill on purchasing power in July enabled the government to provide a first round of responses. The more than 20 billion euros of measures voted – not without difficulty – this summer to support purchasing power (fuel discount, back-to-school bonus, revaluation of social minima, tariff shield on gas and electricity, increase in cap on tax exemption for overtime…) will they be enough to calm the concerns of the French? Soaring prices, in particular food and energy, will continue to put the executive under pressure. While prices at the pump are down, inflation exceeded 6% in July.

Energy sovereignty

Energy sovereignty will also be on the back-to-school menu. We must "work for our energy sovereignty, to support the French, our companies in the context of this war", declared Emmanuel Macron from the Var. Indeed, autonomy may be difficult to achieve and possible energy shortages following the war waged by Russia in Ukraine cannot be ruled out. In this context, Algeria, the leading African exporter of natural gas, and where the president is going at the end of the week, could be one of the alternative solutions while waiting for profound changes in energy policy.

The climate emergency, after a remarkable summer

The summer was marked by fires and climatic phenomena on an unprecedented scale, such as last week's thunderstorms in Corsica. They recalled the urgency of issues related to global warming. This is why the President of the Republic will organize a government seminar at the end of August devoted in particular to ecology, while the Prime Minister, Elisabeth Borne, must also deliver a "strong speech on energy sobriety and transition" during the university. Medef summer school. The Head of State also asked him to “submit in the fall an ecological planning agenda broken down by month and year”, specifies the Elysée.

Security

The summer period was also marked by the return of security to the public debate, after several miscellaneous events, including a gunshot after an urban rodeo and one death and one serious injury during a refusal to comply in Vénissieux (Rhône ) . Occupying all the media space during the summer - as Nicolas Sarkozy did in 2002 - after his reappointment, the Minister of the Interior, Gérald Darmanin, will present a security bill in the fall. The government could convince Les Républicains with its orientation and programming bill from the Ministry of the Interior (Lopmi). The text should make it possible to grant an additional 15 billion euros in budget over five years and will be examined in October in Parliament. The minister of the Interior, Gérald Darmanin, on the other hand, was summoned by the Elysée and Matignon to postpone his bill on immigration. It is scheduled for December, after the organization of a "big debate" in Parliament, as announced by the Minister in early August.

The 2023 Budget

The finance bill for 2023 promises to be perilous for the executive, who only has the word "compromise" in his mouth.

Despite its promises to change the method, the government is already anticipating a forced passage, with possible recourse to article 49.3, to have the 2023 finance bill adopted, for lack of an absolute majority for the macronists in the Assembly. Traditionally, the oppositions vote against to express their disagreement with government policy.

Explosive reforms

The autumn should also mark the real kick-off for the reforms supposed to make it possible to achieve the two main economic policy objectives promised by the Head of State for 2027: full employment and a public deficit reduced to less than 3% of gross domestic product (GDP)? “We can move towards full employment, but we must continue to carry out the essential reforms”, he recalled in his interview on July 14.

Among these, the reform of unemployment insurance, intended both to make budgetary savings and to encourage a return to work, plans to modulate the allowances of the persons concerned according to the health of the economy. . A principle that promises to crystallize tensions, both on the side of the opposition and the unions. Conditioning of the RSA to 15 or 20 hours of weekly activity, already tested in Dijon and Alsace, is also planned.

The other is pensions. The proposal made by Emmanuel Macron during the presidential campaign plans to postpone the legal retirement age to 65, with a system of long and arduous careers. The Minister of Labour, Olivier Dussopt, nevertheless promised to consult the unions just after the first meeting of the National Council for Refoundation.

A perilous return therefore for the government and for Emmanuel Macron who has every interest in taking care of his return to carry out his reforms. Especially since according to the latest Ifop survey published by the Journal du Dimanche, the popularity rating of the President of the Republic is currently only 37%, while that of Prime Minister Élisabeth Borne is now higher (41% ). In an attempt to breathe new life into politics and embody a change of method, Emmanuel Macron will therefore launch the National Council for Refoundation (CNR) on September 8, which will bring together "the political, economic, social, associative forces of elected representatives of the territories and citizens drawn by lot", according to the Head of State.

But the CGT is already planning an interprofessional strike day focused on purchasing power, wages and pension reform, on September 29.

SECOND COMPONENT OF MEASURES

FOR PURCHASING POWER IN FRANCE

At the end of last week, the deputies had already adopted an “emergency” bill in support of purchasing power, representing a total of twenty billion euros in aid. This second text provides for 44 billion euros in additional expenditure. This draft amended budget was adopted by 293 votes to 146, with 17 abstentions.

The Republicans, to whom the executive has repeatedly given satisfaction, supported the text. The deputies of the National Rally, on the other hand, did not take part in the vote and left the hemicycle.

End of the audiovisual license fee

The abolition of the public audiovisual fee of €138, Emmanuel Macron's campaign promise, was voted with the votes of the presidential majority, LR and RN. The Nupes voted against unanimously. LFI provides for an appeal before the Constitutional Council. To compensate for the end of the royalty, the deputies allocated to the financing of public broadcasting a fraction of the VAT for an amount of approximately 3.7 billion euros.

Overtime and RTT

The increase in the overtime tax exemption ceiling has been voted. The deputies also adopted an amendment tabled by LR, allowing employees to transform their RTT into salary.

Revalorization of the index point of civil servants

MEPs endorsed the 3.5% increase in the value of the index point for civil servants, which serves as the basis for their remuneration.

Increased fuel discount

At the end of August, the rebate of 18 cents per liter ended. It will be replaced by a larger discount of thirty centimes per liter in September and October. Then will drop to €0.10 in November and December. With regard to the "transport bonus", paid by companies that wish to pay their employees to cover their fuel costs, the ceiling is increased from €200 to €400.

Maintenance of the tariff shield on energy

The text extends, until the end of the year, the tariff shield on energy prices, which makes it possible to cap the increase in electricity bills at 4% and to freeze gas prices at their level of October 2021. Surprise amendment: the deputies also voted exceptional aid of 230 million euros intended for French people who heat themselves with fuel oil. Three million households should benefit from it.

Compensation for the RSA increase for the departments

To fully compensate for the 4% increase in active solidarity income (RSA), the Assembly decided to allocate 120 million to the departments that pay it. The measure was voted by the left, the RN, LR but also the Horizons group, against the advice of the government. A first.

The majority found at fault on two measures

On several occasions during the examination of the text, the majority therefore found itself caught out by the vote of the deputies, in particular when they approved the release of 230 million euros in aid for homes heating with fuel oil. or concerning the financing of the RSA (active solidarity income), the departments distributing it should receive 120 million euros to compensate for the increase in its amount.

Total renationalization of EDF

The amended draft budget opens up 44 billion euros in credits for 2022, including 9.7 million to finance the renationalization of EDF. The goal is to finance the group and to invest in particular in a “relaunch of the nuclear program in France”, with six new EPR reactors, indicated the Minister of the Economy.

The bill on purchasing power arrives from today in the Senate, with a right-wing majority, and will have to decide on several measures. It will then be the turn of the amending budget for 2022.

HOW MUCH DID BRIGITTE MACRON COST TO THE FRENCH STATE IN 2021?

If the latter has no official status at the Elysée, she is however the First Lady to whom certain missions with the Head of State fall. The report also lists the "missions devolved" to the first lady. She must "represent France alongside the Head of State at international summits and meetings, respond to requests from French people who wish to meet her, supervise official receptions at the Élysée Palace and support charitable, cultural or social works. which contribute to the international influence of France. »

Then the Court of Auditors accounts for its expenses. According to the Court of Auditors, in 2021, Brigitte Macron cost “€292,454 (compared to €291,826 in 2020). »

"In 2021, Mrs Macron took part in nine official trips outside Île-de-France with the President of the Republic, including three abroad, i.e. twice as many as in 2020 but at a level still lower than that of 2019 (12 trips in 2019, four in 2020)” the report also explains.

Brigitte Macron "has no representation budget for her clothes and benefits, for her public and official activities, from the services of the Presidency hairdresser."

A MARSCHALL PLAN FOR THE RECONSTRUCTION OF UKRAINE ESTIMATED AT 750 BILLION EUROS ?

Every year for the past five years, a high-level conference has been held on Ukraine and the reforms it needs to carry out, particularly in the fight against the corruption that is eating away at the country's economy. In its 2021 report, the NGO Transparency International indeed ranks this country 122nd out of 180, still very far behind its EU member neighbors (the worst placed, Bulgaria, is in 78th place).

The war led by Russia, however, has somewhat disrupted the program. And it is reconstruction that is in question until Tuesday in Lugano. Speaking in a video message, President Zelensky stressed that this should be "the common task of the whole democratic world" and "the most important contribution to world peace".

Cost estimated at 750 billion

Participants reflected on a recovery plan for the war-torn country by setting priorities and identifying funding needs. The cost of reconstruction was estimated on Monday at at least 750 billion dollars by the Ukrainian Prime Minister, wondering about “who should pay” before answering that a “key source” of financing should be the seizure of assets of Russia and Russian oligarchs frozen under international sanctions against Moscow. Estimates of the amount of frozen assets range from 287 billion to 479 billion euros ($300 billion to $500 billion), according to Chmygal.

For its part, the Kyiv School of Economics (KSE) had estimated the damage caused so far to buildings and infrastructure at nearly 104 billion dollars. In addition, the country's economy has already lost 600 billion dollars according to some estimates.

Strong UK involvement

Very involved, the United Kingdom, which is one of Ukraine's most active allies, will notably support the reconstruction of the city and the region of kyiv, at the request of President Zelensky, the Foreign Office indicated on Sunday . London also plans to work with Kyiv and its allies to host the Ukraine Recovery Conference in 2023 and establish an office in the UK capital to help coordinate those rebuilding efforts.

Towards a “Marshall Plan” for Ukraine

But it is above all the prospect of a “Marshall plan” which is at the center of the discussions. The participants must, in fact, draw the outline of a plan similar to the American economic program which had made it possible to raise Western Europe from the ruins of the Second World War, this time intended for Ukraine. With this in mind, the European Investment Bank (EIB) must also propose the creation of a new fund for Ukraine, which could reach 100 billion euros, according to sources familiar with the plan.

The expression “Marshall Plan” has been used on several occasions with regard to Ukraine by the German Chancellor Olaf Scholz or even the President of the European Council Charles Michel. The one adopted in the United States in April 1948 and entitled "European Recovery Program" (ERP) offered all the countries of Europe, including the USSR and the other communist countries, to benefit from the assistance to material reconstruction and financial recovery for a period of four years. it's necessary

The President of the Swiss Confederation Ignazio Cassis, however, recalled that reconstruction and reforms were "not in competition" to prepare a European, green and digital Ukraine.

"They are getting stronger," added Mr. Cassis, who called for continuing, despite the war, efforts against corruption and to guarantee the functioning of justice.

EXECUTIVE COMMITMENTS

AT THE G7 SUMMIT

The war and the reconstruction of Ukraine

Summit participants were keen to show a united face against Moscow. The G7, joined by five emerging countries, including India, condemned the "illegal" invasion of Ukraine by Russia. The allies notably promised to provide financial, humanitarian, military and diplomatic support and to remain at Ukraine's side "as long as necessary". The financial aid released for this country in 2022 now reaches 29.5 billion dollars. kyiv should also receive new armaments, in particular sophisticated American anti-aircraft missiles.

To further dry up Russia's revenue, G7 leaders will begin work to put in place a Russian oil cap mechanism to hit a major Moscow revenue stream, a senior White House official has said. . The G7 also plans to impose a ban on the import of Russian gold. To control the price of the black gold sold by Russia, the seven countries "are considering a series of approaches", including "a possible ban on all services that allow the maritime transport of Russian crude oil and petroleum products". , unless the oil is purchased below the ceiling that would be set.

The seven powers, at the end of their meeting, say they are "resolved to support the reconstruction of Ukraine through an international conference and reconstruction plan".

China

Leaders in Germany have denounced Beijing's "non-transparent and market-distorting" international trade practices. They therefore wish to free themselves from dependence on China, by “promoting diversification and resistance to economic coercion” and by “reducing strategic dependencies”. G7 members also raised concerns about human rights abuses in China, urging it to respect fundamental freedoms. They stressed that the situation in Tibet and Xinjiang, where "forced labor" is rampant, is of "great concern" to them.

The final statement also urges China to "fulfil its commitments" under the Sino-British Joint Declaration, guaranteeing Hong Kong certain freedoms and autonomy for 50 years under the "One country, two systems" model.

Alleviating the food crisis

The G7 pledged an additional $4.5 billion to alleviate the global food crisis, bringing total joint commitments to $14 billion for the year. The seven powers also called on countries and companies with large food stocks to assume their responsibilities to alleviate the food crisis triggered by the conflict in Ukraine. They also urge "all countries to avoid excessive storage of food, which can lead to further price increases". In addition, she also reiterated her "urgent call on Russia to end, unconditionally, the blockade of Ukrainian Black Sea ports, the destruction of essential port and transport infrastructure, silos and grain terminals , to the illegal appropriation by Russia of agricultural products and equipment in Ukraine and to all other activities that hinder the production and export of production and Ukrainian exports of foodstuffs”. Russia, for its part, denies having blocked the passage of cargo ships and accuses Western sanctions of contributing to the food crisis.

Climate commitments

The G7 countries have agreed to strengthen cooperation in the fight against global warming. But their ambitions, which come up against fears of energy shortages, have disappointed conservationists. The powers, which must in the short term do without Russian gas, are under pressure to meet their climate commitments.

In their final declaration, the Heads of State or Government certainly reaffirmed "their unwavering commitment" to the Paris Agreement, which aims to limit global warming to 1.5° above the pre-industrial era and their objective to achieve net-zero carbon emissions by 2050. They also underlined the "increased urgency to act" to reduce global greenhouse gas at 2019 levels. The G7 has also committed to a “highly decarbonized road sector by 2030”.

The summit also agreed to create a "Climate Club" made up of volunteer countries to coordinate and accelerate efforts to combat global warming. But critical voices pointed out after the summit that the idea remained vague and risked becoming "just another club", according to Martin Kaiser, the executive director of Greenpeace in Germany.

Energy

Emmanuel Macron, German Chancellor Olaf Scholz, US President Joe Biden, British Prime Minister Boris Johnson, Japanese Prime Minister Fumio Kishida, European Commission President Ursula von der Leyen, European Council President Charles Michel, Prime Italian Minister Mario Draghi and Canadian Prime Minister Justin Trudeau, have pledged to end, by the end of 2022, all new direct public support for the untapped international fossil fuel energy sector. However, in the face of the rush for alternative energy sources to emancipate themselves from Russian fossil fuels, the G7 agreed that public investments could be made in the gas sector "as an interim response".

By announcing these commitments, although the G7 no longer represents the seven largest economic powers, Joe Biden is trying to give this group a more political turn, that of the fight of democracies against autocracies...

SHOULD WE BE WORRIED ABOUT THE THREAT OF ENERGY SHORTAGES ?

Should the time be serious for the Minister of the Economy to present the said sobriety as a necessary passage ”, without alternative?

Three days earlier, during a visit to a national gas control center in Ile-de-France, Elisabeth Borne, accompanied by Agnès Pannier-Runacher, had already set the scene. “We have to be energy efficient. I don't know if it's the right term, but in any case we must reduce by 40% by 2050” call for sobriety. A roadmap should apply from this summer to the State, administrations and large companies.

Now the energy companies are turning into “fathers of morality”. "We call for awareness and collective and individual action for each of us to change our behavior and immediately limit our consumption of energy, electricity, gas and petroleum products", wrote Jean-Bernard Lévy and Patrick Pouyanné , CEO of EDF and TotalEnergies, as well as Catherine MacGregor, Managing Director of Engie, in an article published in the Sunday Journal

In the forum of the JDD, the three leaders of French energy suppliers therefore call for "a collective and immediate effort" to avoid a winter under tension. The three call on the French to "immediately" reduce their consumption of fuel, electricity and gas. According to the three energy access providers in France, the risks of shortages and soaring prices are such that they will threaten “social cohesion” next winter.

Indeed "for months now, the European energy system has been under great tension and the French energy system has not been spared", explain Catherine MacGregor, Managing Director of Engie, Jean-Bernard Lévy, Chairman and CEO of EDF. , and Patrick Pouyanné, Chairman and CEO of TotalEnergies. “Acting this summer will allow us to be better prepared to tackle next winter, and in particular to preserve our gas reserves.

These tensions are explained by the war in Ukraine and the Western sanctions, first of all. Deliveries of Russian gas by pipeline have "decline sharply for some countries, including France". “Although increasing, imports of liquefied natural gas (LNG) are today still too limited to compensate for these declines. The level of alert on gas stocks at European level is therefore high and rationing measures are put in place in certain countries”, they underline.

The world oil market could therefore experience tensions between the level of production and demand during the summer. In the United States, we are entering the 'driving season', the period of the year when car travel is the most important, because people go on vacation. And therefore the one where we need more automotive fuel. In China, the relaxation of the drastic confinements imposed on certain cities will lead to a return to normal travel, and therefore an increase in oil demand.

The weather also has something to do with it. "Climatic conditions and drought are amputating hydraulic production", write the three leaders in their forum. A large part of the French nuclear fleet actually requires water from rivers to be cooled. Consequently, too low a water level, as was the case at the beginning of June for example in the Rhône, can jeopardize these activities.

To these causes are added other handicaps as suggested by the manager of the electricity transmission network (RTE) two weeks ago with TF1. "We are in fact in a pivotal period, marked by a series of events to manage: the closure of oil and coal-fired power stations, that [nuclear] of Fessenheim, but also the delay in the development of other modes of generation”, notes RTE.

In addition to May 24, 27 of the 56 French nuclear reactors were shut down, according to EDF. That's almost half. An unprecedented situation, which is explained by planned closures but also by an unforeseen problem of corrosion. While half of the nuclear fleet is shut down, the Ministry of Energy Transition also reserves “the possibility of operating the Saint-Avold [coal] power plant for a few more hours if we need it l 'next winter'.

In fact, the risk of a shortage hovers so that in the short term, any savings in gas or electricity made today will make it possible to secure stocks for the winter. In the medium term, the government would display more ambitious intentions. "The objective is a roadmap that will allow us to reduce energy consumption by 10% compared to our usual benchmark within two years," said the Minister for Energy Transition. This corresponds to “the first step of the RTE scenario, which aims for a reduction of 40% by 2050”.

However, France is not the only country concerned. To compensate for the reductions in Russian gas deliveries, Germany will, for example, return to coal. A provisional appeal, promises the German Minister of Economy and Climate, who recognizes that this is a bitter decision. The extension of certain power plants will be a short-term measure, over a “limited” period, until March 2024, assures Berlin.

Other countries in Europe have recently announced similar measures. Austria, also dependent on Russian gas, has also announced the upcoming restart of a disused coal-fired power plant, in order to be able to compensate for a possible shortage.

Latest example: the Netherlands. Until now, Dutch coal-fired power plants could not operate at more than 35% of their capacity, according to a law in force since January 2022 to reduce the country's CO2 emissions. They can now "operate at full capacity", announced Monday, June 20 the Dutch Minister of the Environment and Energy, Rob Jetten.

While she advocates energy sobriety, Elisabeth Borne announced last Thursday the extension of the tariff shield until the end of the year. A good signal to encourage people to reduce their consumption ?

THE PURCHASING POWER BILL

HARDLY DEBATED

Its content is already the subject of a bitter political battle between the oppositions and the executive, the former counting on the absence of an absolute majority in the National Assembly of the presidential camp to impose some of their key measures. This is why the Minister of the Economy alerted on the level of indebtedness of France, this Monday. A way of calling on the opposition to restraint before the debates on the purchasing power bill in the National Assembly.

France has reached its “alert rating” on public finances, indeed estimated the Minister of the Economy Bruno Le Maire, Monday June 27, at a time when the executive is seeking a compromise with the opposition for its project. purchasing power law.

"Everything is not possible, quite simply because we have reached the alert level on public finances", affirmed Mr. Le Maire, adding that "financing conditions have changed" and that today the France borrows “at more than 2%” to finance public spending, when it did so recently at negative or very low rates. According to the National Institute of Statistics and Economic Studies (Insee), French public debt exceeded 2,900 billion euros at the end of the third quarter, or 114.5% of gross domestic product (GDP), due to also from sluggish economic growth.

The purchasing power bill, the subject of all negotiations

On the right, the new president of the Les Républicains group in the National Assembly, Olivier Marleix, strongly insisted on the risk of an increase in the French debt, Monday morning on Europe 1, a few minutes before Mr. The mayor. “On the question of purchasing power and such a problem for our compatriots, obviously we will do everything to converge with the government” and “move forward on these measures”, declared the deputy for Eure-et-Loire then that the Republicans, if they refuse to participate in the government, ensure that they will possibly vote on texts “on a case-by-case basis”.

Mr. Marleix however laid down two conditions: the need to take into account the fact that the question of purchasing power is "a major subject for working France", and "obviously the government will have to agree to to consider the question of the financing of these measures”.

“We will be demanding of the government so that it is funded. The French debt situation today is very serious (…) The government cannot say: “Come on, 30 billion additional debt!” It would be irresponsible,” he said, promising that LR deputies “will make proposals on the subject of financing.”

On the left, the deputy and national secretary of the French Communist Party, Fabien Roussel, wished on CNews "a sharp increase in purchasing power" with in particular "an immediate drop in VAT on gasoline". “We will not be satisfied with crumbs” and “we will all take to the streets if necessary to obtain these measures”, he warned.

A boost of eight billion euros for social benefits

Asked about the proposal made by several opposition parties, such as Les Républicains or the National Rally, for a reduction in fuel tax, Mr. Le Maire assured that the government was going to “discuss” with these formations but that “ the spirit of compromise must be accompanied by a spirit of decision”.

The extension of existing measures

Several measures already implemented in recent months to combat rising prices should be extended. This is the case of the tariff shield on energy (which has already been extended by decree until December 31, 2022), and which caps the sale prices of gas and electricity. The discount of 18 cents per liter on fuels also still holds, at least for the month of August. The government is thinking in parallel about a new device more targeted on large wheelers, but its articulation with the discount is not clear-cut, assured Friday June 24 the Minister of Energy Transition, Agnès Pannier-Runacher.

The inflation allowance, one-off, should also make a comeback under the name of food check. The government has abandoned the idea of ​​a monthly food check, which was to allow access to quality products. This new financial aid, the amount of which has not yet been fixed, will be paid “in one go” and “at the start of the school year”, directly into the bank account of the most modest, announced the Prime Minister, Elisabeth Borne. While ensuring that the reflection continued on a food check more targeted on "quality" and "organic" products.

Finally, the Macron bonus, which appeared during the "yellow vests" crisis, will be made permanent and its ceiling tripled. Companies will therefore be able to pay up to 3,000 euros to their employees, or even 6,000 euros for companies with fewer than 50 employees and those with a profit-sharing agreement.

Revaluations of social benefits

Several social benefits need to be upgraded. Retirement and disability pensions under the basic schemes, the activity bonus (the lump sum of which is 563.68 euros), but also family benefits and social minima, including the active solidarity income (550. 93 euros for a single person without resources), the allowance for disabled adults (919.86 euros maximum), the solidarity allowance for the elderly (916.78 euros for a single person) should increase by 4% , according to the bill consulted. This boost will be retroactive to July 1. The cost of these revaluations amounts to "a little less than 7 billion at the end of 2022", according to Les Echos

The amending finance bill, presented at the same time as the "purchasing power" bill, should also incorporate a 3.5% increase in personalized housing assistance (APL), which would represent a additional expenditure of 168 million euros.

New measures put in place

The government is also planning a series of new measures. Civil servants will thus see the end of the freezing of their index point, which serves as the basis for their remuneration. The public service unions are asking for between 3% for the CFDT and 20% for the CFTC. A 1% increase would cost the state 2 billion euros per year, according to the government, which should announce the value of the new point on June 28.

A reduction in the contributions of the self-employed is also provided for in the bill. It should allow them to earn “550 euros per year at the level of the minimum wage”, assured mid-May the spokesperson for the former government Gabriel Attal.

The bill also provides for an increase in the “transport bonus” paid by companies to their employees to cover part of the cost of their home-work travel. The upper limit of tax and social security exemption for the employer's assumption of the fuel costs of its employees will thus be doubled, from 200 to 400 euros for the years 2022 and 2023. Employees will also be able to combine this bonus with the paid by the employer for 50% of the price of public transport season tickets.

The abolition of the audiovisual license fee should also be effective next fall, with a gain for households of 138 euros, ie a shortfall for the State of more than 3 billion euros net.

The text also wants to open up the possibility of establishing a profit-sharing scheme by the employer even without a branch agreement or with staff representatives. The objective is to allow employees to benefit from the sharing of the value created in the company. On the other hand, the track of an “employee dividend”, which was to make participation in the company compulsory, “does not appear in the initial text at this stage”, confirms the Ministry of Labor.

In addition to these measures, the government plans to include in the amending finance bill a “rent shield”, aimed at capping rent increases for one year at 3.5%, confirmed Bruno.

“Politics is about choices (…) It is imperative to reduce public debt”, but “we must at the same time protect our compatriots who are the most fragile, but protect them responsibly. », concludes Bruno Lemaire.

THE WAR IN UKRAINE WILL HEAVY WEIGHT

ON GROWTH AND INFLATION

WORLDWIDE ACCORDING TO THE OECD

The consequences of the war in Ukraine could cause inflation to soar to 8.5% among OECD member countries in 2022, the international organization warns in its latest economic forecasts on Wednesday, a level twice as high as the one she anticipated in December.

The rise in prices should then slow in 2023, warns the OECD, which brings together 38 developed countries across the planet, while warning of a worsening of these prospects in the event of new economic shocks.

Global growth for 2022 lowered to 3%

Global growth will strongly feel the consequences of the war in Ukraine this year, the organization also warned, raising its growth expectation to 3% against 4.5% last December. Particularly affected, the euro zone should record a 2.6% increase in its GDP against 4.3% previously forecast, and France, for example, an increase of 2.4% against 4.2% imagined in December by the organization international based in Paris.

"The world will pay a heavy price for the Russian war against Ukraine", warned the number two and chief economist of the OECD, Laurence Boone, in an introductory text to these forecasts entitled "the price of war". “A humanitarian crisis is unfolding before our eyes, leaving thousands dead, forcing millions of refugees to flee their homes and threatening an economic recovery that was on the way after two years of the pandemic,” she continues.

An invoice that changes between geographies

The bill for the war varies significantly depending on the geographical area: the euro zone sees its growth forecast significantly reduced to 2.6% against 4.3% in December, with a plunge for Germany to 1.9% (-2 .2 points) and France at 2.4% (-1.8 points). The United Kingdom is doing quite well this year with 3.6% expected (-1.1%) but stalls completely at 0% for the 2023 forecast, against 2.1 expected previously.

The United States should experience growth of 2.5% in 2022, against 3.7% expected in December, and China of 4.4% (against 5.1%). Still deemed “temporary” in September 2021 by the OECD, inflation has picked up markedly with the persistence of problems in supply chains and soaring prices for energy, food and metals, aftermath of the war.

While the OECD sees these pressures easing next year, it nevertheless warns that, given the prevailing uncertainty, they could still worsen.

But soaring inflation could lead to sharp interest rate hikes by central banks, further threatening an already shaky economic recovery, the organization fears.

NORTH KOREA FACES 1.2 MILLION COVID-19 

CASES IN THREE DAYS

While almost all countries have been affected to varying degrees by successive waves of Covid-19 for more than two years, North Korea has always claimed to be part of the three territories, with Turkmenistan and the Tuvalu islands, to have never been exposed to the virus, observes Vice.

If doubts still remain as to this absence of SARS-CoV-2 on North Korean territory since the start of the pandemic, the situation has in any case changed since Thursday, May 12. That day, state media reported – admittedly half-heartedly – ​​the very first case of Covid-19 in the country. Since then, there have been nearly 1.2 million people infected and fifty deaths from infection with the virus. An impressive development in such a short time which, according to Vice, could be greatly underestimated. A question is now on everyone's lips: how did the virus enter the country? Especially given the fact that “North Korea was one of the first to seal its foreign borders in January 2020 and to paralyze international trade – including with China”, recalls Vice.

According to Ethan Jewell, Seoul-based correspondent for NK News, one of the main avenues to explain the spread of the virus on North Korean territory would however be to be sought on the side of China, a country also hard hit by the Covid- 19 for several months. Also according to Vice, "there have been numerous reports of people making illegal trips [...] in an effort to provide essential resources to impoverished and starving North Korean communities".

A strained medical system

According to Vic e, North Korean soldiers could then have found themselves in contact with some of these Chinese smugglers. They would then have gone to a military parade organized in Pyongyang on April 25, transforming the event into a giant cluster. For Hong Min, a researcher at the Korea Institute for National Unification, there is no doubt: “The current Covid epidemic [in North Korea] is closely linked to the April 25 parade”.

On the other hand, faced with the number of cases which continues to increase, the North Korean health system is struggling. "In town, you have a very big general hospital... but if you go to the villages, they hardly have any clinics," Hong Lim explains. The medical system is under strain and the shortage of drugs is evident.”

Due to the few people vaccinated and the lack of available treatments, experts believe that North Korea could introduce draconian containment measures to limit the spread of the virus, like its Chinese neighbor.

WHY ARE THE REMUNERATIONS 

OF BIG BOSSES EXPLODING ?

One name in particular caught the attention of the French press: that of Carlos Tavares, the general manager of the automobile group Stellantis (born from the merger between Fiat Chrystler and PSA Peugeot Citroën), supposed to receive 66 million euros in total compensation. in 2021, including a fixed portion of €19 million. This figure, made public during the intervening rounds of the presidential campaign, was deemed "shocking" both by the candidate of the National Rally, Marine Le Pen, and by the candidate president Emmanuel Macron, who also called for a cap on executive compensation at European level.

The case of Carlos Tavares indeed appears all the more controversial since, under the mandate of François Hollande, a law was adopted so that the employer's remuneration is subject to the approval of the shareholders. On April 13, the latter also opposed the payment of 66 million euros at the general meeting of the group. But the vote took place at the new headquarters located in the Netherlands, where this vote only has an advisory function... The CFDT central union representative, thus bitterly regretted the move: was for geographical neutrality, not for financial advantages…”

A decorrelation of performance

During the general assembly of the Stellantis group, the president John Elkann had justified this level of remuneration by explaining that he wanted to "reward the performance" of the manager who carried out the merger between Fiat Chrystler and PSA Peugeot Citroën.

Yet the question of whether to reward success financially, although it has been widely debated in psychology since the seminal work of Edward Deci, is not what is primarily at stake here. What is shocking is the level of this reward. How can we explain it? Is this a relevant practice in terms of management?

66 million euros for Carlos Tavares: the salary of the leader of Stellantis disputed (France 24, April 14, 2022).

In the United States, managers earned on average 254 times more than their employees in 2021, compared to 238 times in 2020. A level close to that observed in France. However, if the absolute level of this difference can legitimately shock, it is especially its evolution during the last decades which constitutes the most surprising phenomenon.

Indeed, this gap was only 1 to 20 in the United States in 1965. This was also the maximum pay gap recommended at the beginning of the 20th century by the famous banker JP Morgan, not well known for his activism. egalitarian. What can explain such inflation? This is certainly not a proportional increase in the talent and responsibilities of the big bosses: whatever the indicator chosen, nothing indicates that the performance of the leaders (and of the companies they lead) has multiplied by 20 since the 1960s.

Consanguinity of boards of directors

In fact, the explosion in the compensation of managers of listed companies is explained by the conjunction of two perverse effects. The first of these effects is the consanguinity of boards of directors and supervisory boards, known in France by the sweet name of "barbichette" , in reference to the nursery rhyme "I hold you, you hold me by the goatee", which becomes: “you are a member of my board, you vote my compensation, I am a member of your board, I vote your compensation”.

To legitimize executive compensation, some argue that there is a "market" for talent, and that compensation, however exuberant it may be, would correspond to the "market price" of skills. However, if such a market exists for the leaders of large groups, it is certainly not a free market and the price there is certainly not an objective measure of value. Indeed, the boards of directors of listed groups are often made up of individuals who are themselves leaders, and who often sit on several other boards.

There is therefore a form of collusion more or less displayed between the managers and those who evaluate their action and decide on their remuneration. Moreover, this situation is not specific to French capitalism (even if collusion between alumni of the same Grandes Ecoles and the same Grandes Corps tends to reinforce it), since it is found, for example, in the United States.

The consanguinity of the boards of directors and supervisory boards, one of the factors which maintains the salaries of the leaders on the rise.

We can thus explain the level of remuneration of the big bosses by the fact that they attribute it to themselves, through their administrators, with whom they share the same interests and the same networks. However, if this phenomenon can make it possible to understand the amount of remuneration, it does not explain their multiplication since the 1960s. Indeed, the endogamy of the instances of power is as old as the world, and nothing indicates that it be worse today than it was yesterday.

“Lake Wobegon effect”

To explain the explosion in executive compensation, we must therefore invoke a second perverse effect, much more formidable because it is largely counter-intuitive. It was from the 1990s that regulations gradually imposed disclosure of the levels of remuneration of the managers of listed companies. In the United States, this took the form of a new rule enacted by the Securities and Exchange Commission (SEC) in 1992. In France, it is the NRE law of May 15, 2001, revised by the financial security law of August 1, 2003 which fixed this framework.

In both cases, the objective was the same: to better inform shareholders about executive compensation, with the underlying assumption that if this compensation became public, it would remain contained. However, paradoxically, it is exactly the opposite that has happened: it is the publication of salaries that has caused their inflation.

Indeed, as soon as the remuneration is public, it becomes a measure of the value of the leaders and therefore an issue. As long as it was secret, it did not make it possible to compare individuals and therefore remained a purely private matter. Having become public, it imposes itself as the standard of their talent. When a listed company appoints a new leader and decides to pay him less than his predecessor, everyone knows it, and we will deduce that he is not as capable as the one he replaces. Similarly, if the leader of a company is paid less than the average for his industry, everyone knows it, and we will deduce that he is not among the most talented.

It is because remuneration is public that all leaders seek to earn more than the average and that all boards of directors are constantly paying them better. Indeed, a director who would publicly doubt the competence of the manager would cause a collapse of the share price. Conversely, to positively influence shareholder value, a board of directors has an interest in giving all the most patent, measurable and most visible signs of the extreme confidence it has in the exceptional talent of the manager: this is what he does when he decides to increase it. Therefore, once public, executive compensation becomes instrumentalized as both a measurement tool and a mechanism of influence.

The phenomenon of instrumentalization of the average is known in the United States as the "Lake Wobegon effect", named after the fictional town of Lake Wobegon, where, as the legend goes, "all women are strong, all men are beautiful and all the children are above average”. If it is impossible for everyone to be better than the average, the fact that everyone seeks to be so causes their inflation.

A simple solution for a recent anomaly

What to remember from all that ? In the light of history, the explosion in the remuneration of the bosses of large companies remains an anomaly, and it is a recent anomaly (the French economist Thomas Piketty condemns “meritocratic extremism” in this regard). From a managerial point of view, the current levels of remuneration are not justified, because for a long time companies have been very well managed without their bosses being so handsomely paid.