Return to Socialism


Presidential election is going on in France.

The current President, Nicolas Sarkozy, is in danger of losing the election. It is widely expected that the Socialist Party’s nominee, Francois Hollande, will win the election.

I am in no way close to commenting on the wisdom of the electorate. The only comment that a disinterested world citizen could make is that it may not be that wise for any European nation to return to Socialism. That would just be the anti-climax, when the developing nations are discovering the positive virtues of Capitalism (albeit rather late in the day).

Yes, it is important to attend to the needs of the jobless youth of France, and at the same time control the budget deficit. The problems that France faces are not new. It is easy to forget that President Sarkozy made some important changes to unchangeable national policies such as hours of work. It takes guts to tackle the fundamental issues plaguing the economy and be firm in regulating the ungovernable. At a time when Europe is suffering all over, it takes a tough President of the fifth largest economy in the world to not only talk tough but take his nation along with him in the difficult journey of controlling deficit and regulating the economy.

A return to Socialism which imposes huge taxes and spends large amounts of money on job creation by the State may just not work out for France, irrespective of the status of its economy. Well, no one can stop the French citizens from throwing out President Sarkozy and electing a Socialist President with a totally different economic and national agenda. After all, France is a democracy and taught the world the importance of changing rulers in the 18th Century itself.

But, France could set itself on a wrong path towards an irrecoverable economic status if it does not continue its austerity programs, in the light of what is happening in Greece, Portugal, Italy and Spain. The contagion is spreading, and no country will be spared if austerity is thrown to the wolves. A temporary tightening with compassion is what is required and it is the need of the hour.

I have no fascination for the flamboyant President, but I believe he did a few things right for France and for the European Union. If he loses, the new President would do well to learn from the past five years and pick up the good nuggets which have really worked well for France. It is not important to stick to an ideology just for the sake of it. India is a good example of how ideologies have not worked out in the hustings. Pragmatism and a deep understanding of the key issues, with a solution mindset, are what would position France on the growth path – it should aim for a GDP growth rate of 3 to 4% (from the current anemic 1.8%), rather than starting to shrink. With an economy more than twice the size of India, and exports of almost twice that of India, France plays a very important role in the world economy, and should realize its critical importance to the world when making key economic decisions.

In any case, all the best to the people of France !

Cheers,

Vijay Srinivasan
22nd April 2012
Mumbai

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2 comments

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