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Conversation: France's Struggles With the European Crisis

8 MINS READNov 8, 2013 | 22:13 GMT
Editor's Note

A previous version of this article contained a video conversation. That video is now unavailable for technical reasons, but included below is a transcript.

Reva Bhalla: Hello, my name is Reva Bhalla and today I'm joined by Adriano Bosoni who is calling in from Barcelona to talk with me about how France is struggling to cope with the European crisis.

So Adriano, I know you're in Barcelona, where at every corner Catalonians are expressing their frustration with Madrid but before we get into that, let's zoom in to a part of northwestern France on the Atlantic in the Brittany region, where we've seen a lot of very interesting protest activity take place over the last several days. Set the stage for us — what's going on over there?

Adriano Bosoni: What protesters in Brittany are demanding is the cancellation of the so-called eco-tax, which is a tax on vehicles that transport heavy goods, including food. Food producers, people in agricultural sector, are saying that this tax will make the products even more expensive so they want the cancellation of the tax. Under pressure from these groups, the government of President Francois Hollande promised to temporarily suspend the tax, but the producers want a cancellation. Its interesting to see that somewhat related to that incident there was a controversy in France because the concession to collect the tax was given to an Italian company instead of a French company. So there were people saying that French companies should be in charge of these kinds of things, which goes against EU legislation. So in this whole episode we see two things. First, it's a reminder of the strength of the agricultural sector in France, and second, there are also some nationalist/regionalist feelings playing too.

Reva: So Adriano, I remember driving through France this past summer seeing the very, very high toll rates that were actually increasing over time as the state is trying to raise revenue. I can understand why the Bretons are actually very angry about this. Now, is the intent behind the eco-tax to try to urge more businessmen to use more rail and river transport instead of road transport to save money?

Adriano: Holland is in a dilemma because the French government is trying to reduce its deficit so it had to either create new taxes or cut spending, and if he gives in and he cancels the eco-tax he will have cut spending somewhere else or he will have to create new taxes somewhere else. And related to what you are saying, after the protest by this farming group called the "red caps" another group was created and it called itself the "green caps" because they were supporting the eco-tax because they said that the money collected by the tax should be spent to improve public transportation so France stops emitting so many gases and polluting the environment. So it's interesting to see that whenever the French government tries to help a certain group, another group will protest.

Reva: And so I'm interested in this particular group and the symbolism behind it because this red bonnet group, the red bonnets trace back to these 17th century peasant protests in France. Why is this particular region of France more prone to protest activity?

Adriano: As you were saying, this group has a very interesting sense of history and tradition and belonging to the area. The red caps were a group a peasants who protested taxes in the late 17th century and this group is taking that name, which highlights a long tradition of protest in France. Because of its geographic position, with the Pyrenees in the south, with the Alps in the southeast, with the Atlantic in the north, France has had relatively the same borders for over a millennium so we're talking about people who have been there for a very long time and who have developed a very strong national identity and a very strong sense of belonging. So the French are a very cohesive people but at the same time are a people who are prone to take it to the street to protest and to voice their concerns.

Reva: And perhaps Brittany is not the only place we should be watching very closely in France outside of Paris but also in the south on the Mediterranean in Marseilles, which also has a very deep history of resistance against Paris in spite of this very strong, centralized nationalist culture that France has been able to develop over centuries.

Adriano: Yes, exactly. And as I said before, Hollande is dealing with a very deep dilemma because on the one hand, his government has sought a very conciliatory policy trying to talk with everybody and to make concessions to everybody to try to keep social unrest at bay. But at the same time, this very same policy is preventing the French government from applying substantial structural reforms that France needs badly to improve its lost competitiveness. And in the context of a declining economy, rising unemployment and lack of reforms, we will see that people are going to be more and more likely to take it to the streets to protest.

Reva: And in fact that's something we were just discussing this week with a recent poll saying that two-thirds of French people are ready to take to the streets to protest. Now, how is that different from the past couple years of us tracking the crisis in France, and really the demonstrations didn't seem to be reaching a critical point — what's different now looking into the year ahead?

Adriano: As you were saying, protests are nothing new in France. In fact, it's a part of the French culture. What has changed is that the economic crisis is deepening and it's spreading to the north of Europe, whereas a couple of years ago we were talking about the crisis in Greece, in Spain, in Portugal. Now we see that unemployment is also rising in northern Europe, in countries that we generally describe as the core. And France is a key example. Unemployment is going up, people are getting increasingly upset with the government, and we have to keep in mind that not only people who have lost their jobs are upset, there is also a huge group of French people who are afraid that they could lose their jobs or that their quality of life could worsen, and this growing skepticism in the French population is leading to a decline in trust of the ability of the French government and in the French establishment to find solutions to the crisis.

And this is a trend that we see elsewhere in Europe. In most European countries, we see that most people are getting increasingly upset with the elites and the anti-establishment and anti-mainstream parties sentiment is growing, and this is what explains the electoral growth and the growth of popularity of nationalist parties, of anti-establishment parties, of parties that criticize the status quo and the elites that put Europe in its current situation.

Reva: So Adriano, it sounds like you're saying that while we may be used to protests in Europe, these protests are going to be taking on a much deeper significance as the pressures of the crisis grow. And I think related to that is the declining credibility of institutions not only in the state governments in Paris or in Madrid but at the EU-level as well, the institutions that are putting pressure from Brussels to Paris to implement reforms and meet deficit targets that these states simply can't do without suffering huge political and social costs. What do you see for the year ahead?

Adriano: Yes, a point that we stress at Stratfor is that this used to be a purely financial crisis but it soon evolved into an unemployment crisis, and the more people are losing their jobs or the more people are afraid of losing their jobs, the more they will take to the streets to voice their concerns, and the more the elites will lose their credibility. So what we will see in the coming years is a serious threat to the foundations of the European Union, to the free movement of people, to the free movement of goods, to the free movement of capital, to the free market, because people are starting to think "Well, maybe this whole EU thing is not such a good idea" and this is what making the euroskeptical parties so popular these days.

Reva: So I guess the lesson for today is do not be fooled by these marginal improvements in growth rates that we see coming out in the news. This crisis is far from over, and the coming year is certainly going to hold a lot of frictions that we're going to be covering closely in this crisis of the European Union. Thank you, Adriano, for joining me today, and thank you all for joining us for this week's conversation. We'll see you next time.

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