France, Germany are worlds apart
The countries’ economic realities appear through the window of a speeding train
The journey by high- speed train between the capitals of France and Germany takes about eight hours. It is a trip across countries facing very different economic realities today. Even at 250 km/ h, some of these differences can be seen from the window of the train. Many of Germany’s towns and cities, even their train stations, have a prosperous veneer. France’s towns, cities and railway stations look rundown by comparison. There is obviously much less money to spend in shops, on cars and on roads.
Germany’s prospects, while not brilliant, aren’t bad considering how much Europe’s “Dystopian decay,” as one commentator put it, weighs on the German economy and psyche. France, on the other hand, is trapped in a dark tunnel from which there does not yet appear to be an escape.
After the humiliation of the German occupation, it was Charles de Gaulle’s conceit that France was Europe’s natural leader. But for 150 years, France has not really had the financial wherewithal to support such a claim.
The Germans would be Europe’s natural leaders, if only they wanted the job. The Germans’ reluctance is uncomplicated. Still hamstrung by guilt over the Second World War, they don’t want to lead. Furthermore, as several businessmen who joined the train in the industrial heartland of the Rhine told me, Germans resent using their hardearned money to rescue countries such as France which, as one traveller noted, has become so accustomed to living beyond its means it has not turned a budget surplus for 37 years.
The usual generalizations about Teutonic and Gallic work habits and thrift are borne out by the numbers. France, which recently lost its cherished AAA credit rating, carries a total debt that makes up more than 75 per cent of its yearly gross domestic product. According to Goldman Sachs, the French economy is set to contract by 0.4 per cent next year after a decade in which it only managed an average annual growth of 0.5 per cent. Air France is losing money. Oh, and unemployment is nearly 10 per cent.
Germany’s books look much better. Its economy, which has a stronger and deeper industrial base than any other in Europe, has continued to hum along, stoked by exports that have been helped by the big drop in the value of the euro. The country’s annual growth rate has been double that of France for years, while its unemployment rate is about half that of its neighbour.
Germans being Germans, there has been much angst about what their complicated relationship with the struggling EU might do to their savings. Still, consumer confidence remains high according to polling done late last fall. Lufthansa made more than $ 1 billion. Parts of Berlin look like a vast construction site. Travelling around Paris for several hours, there were no construction cranes to be seen.
There are also differences in how the two countries believe Europe should respond to its precarious financial situation. The Germans have demanded that the EU’S weak sisters produce austerity budgets and be held strictly accountable for them. The French, who are one of those weaker sisters, have signed on to this, but only reluctantly.
Though they would be badly scarred if the euro fails, the Germans don’t yet confront an economic calamity. However, it is possible that they have spent more time wringing their hands about Europe’s debt crisis than the French, while trying hard to not become too deeply involved.
The French, being French, have other concerns aside from their economic woes. Well read publications such as Le Nouvel Observateur, L’express and Paris Match have been obsessed for months now with the saga of Dominique Strauss- Kahn, the disgraced former head of the International Monetary Fund whose chances of becoming French president ended abruptly when — depending on whom you choose to believe — he was involved in a sexual escapade last May with a maid, or raped the woman at a New York hotel. The latest twist is that the philanderer’s immensely wealthy wife, Anne Sinclair, started work Monday as boss of Huffington Post’s French website.
A friend who travels in France’s highest social and political circles described “l’affaire DSK” as “une tragedie humaine.” She acknowledged it has often overshadowed discussion of what she called “la tragedie inhumaine,” which is the fiscal quagmire that France seems unable to pull its boots out of.