French prime minister urges EU to spur economic growth

[Uraniun235]

Source

French PM warns of lingering economic risks
Job security, social safety net threatened by ‘sluggish growth’
The Associated Press
updated 5:23 p.m. PT, Sat., Sept . 5, 2009

CERNOBBIO, Italy - The prime minister of France, the country perhaps most associated with the cherished "European model" of job security and social safety nets, warned Saturday that it may prove unsustainable because the region's economies are too stagnant.

As Europe and the rest of the world struggle to emerge from the worst economic downturn since the Great Depression, France and Germany have already recorded a small level of growth — 0.3 percent — in the second quarter this year.

But French Prime Minister Francois Fillon noted that while forecasts point to 1 percent growth in the euro zone for 2010. That is half the expected growth in the U.S., and Asia is widely expected to grow at a 4 percent clip.

"With this sluggish growth, we cannot preserve the European social model or reduce our public debt," said Fillon, addressing a high-level gathering of political and business leaders at Italy's Lake Como. "The level of our structural deficits threatens the long-term survival of our economy," he added.

Fillon spoke as finance ministers of the Group of 20 rich and developing countries meeting in London were expected to commit to boosting growth.

The International Monetary Fund has recently estimated global growth in 2010 at 2.5 percent.

EU nervously eyes numbers
But at the Ambrosetti Forum meeting — an annual gathering that is part of a glittering circuit that includes January's World Economic Forum in Davos, Switzerland — there was hand-wringing over Europe's prospects.

Massimo D'Alema, a former Italian premier and foreign minister, warned Saturday that the European Union may come out of the recession weakened, according to the Apcom news agency.

There has long been concern in the European Union that globalization would hasten a transfer of jobs away from its core economies, prosperous but jittery nations where an aging population has come to expect high wages, job security, long vacations, health and other benefits and a comfortable retirement.

Changes could include spending cuts
Fillon warned that European governments will not be able to cover social costs or reduce public debt without a change of course. He called for "refocusing (EU) policies to serve growth and European competitiveness against a background of globalization, and restoring our public finances by means of a concerted plan" that included cuts in public spending.

Such plans would likely find opposition in Fillon's own country, where unions have traditionally been very powerful and many politicians rail against the "Anglo-Saxon model" which favors the efficiency of flexible markets over guaranteeing individuals' quality of life.

While a free-market conservative like his boss — President Nicolas Sarkozy — Fillon still favors the European model and government support for promising industries. He proposed strong investment in research and innovation and said strategic sectors should include energy and climate within a "green growth" plan.

Wolfgang Schussel, who was chancellor of Austria from 2000 to 2007, appeared to agree. "We are insistent on the inflexibility of labor markets more than creating new jobs. We know we have to create more jobs, more innovation."

Italian President Giorgio Napolitano, who opened Saturday's session with a speech from his office in Rome, said the crisis is "bound to have serious consequences in the labor market in the coming months." Napolitano, whose voice is influential in Italy even as his role as president is largely ceremonial, called on Europe to do its part with a united stance as the world tries to come up with new financial institutions.

Nouriel Roubini, a New York University professor widely credited with foreseeing the current crisis, is among the delegates here who are predicting a slow recovery for advanced economies. At a news conference Friday, he said high unemployment will be a problem and predicted that the growth rates in the advanced economies will be low for years.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

URL: http://www.msnbc.msn.com/id/32705911/ns/world_news/

Is Fillon correct that Europe needs greater growth in order to maintain its current social policies, or is he trying to spook Europe into adopting policies which favor growth in the interest of making money?

[The Duchess of Zeon]

I see no real problem with the idea that the welfare systems in Europe need an overhaul. They are, for political reasons, geared heavily toward pleasing elderly people, which is foolish. The elderly should be cared for primarily for their relatives, and the vast entitlements they are given under European social nets should be sharply curbed. Furthermore, the entire concept of retirement is a ludicrous one, created only by the economic surpluses of the 20th century, and should be accordingly curbed. Many of the conservative objections to the welfare system over the performance of the European model would, I suspect, fall flat if merely that countries like France and Germany began providing the same protections to the elderly that they provide to anyone else, instead of vast additional entitlements delivered to those who no longer work. The first thing to do to start is to tie the retirement age to the average age of death, I think 75 would be a pretty good figure.

We have substantial evidence that when people stop working, their brains just rot from a lack of use anyway, and they quickly become senile. So the myth of retirement, ultimately, is just that, and in Europe the amount of vacation time and support one receives on the job and the strict labour laws means that you can enjoy life while working. Ergo, no real purpose for the low retirement ages they have, and the vast retirement perks that the European states support. Shaving through these would put the European Union on much better footing and is a quite unproblematic way of dealing with any structural issues in their economies.

[Knife]

That works just fine until you come across the problem of old people staying at work and not enough jobs for younger people due to nobody retiring. I agree with the general problem and solution you described, but there is a balance in there as well. Eventually you have to have incentives to have old people free up jobs for younger generations.

[Serafina]

We have substantial evidence that when people stop working, their brains just rot from a lack of use anyway, and they quickly become senile. So the myth of retirement, ultimately, is just that, and in Europe the amount of vacation time and support one receives on the job and the strict labour laws means that you can enjoy life while working. Ergo, no real purpose for the low retirement ages they have, and the vast retirement perks that the European states support. Shaving through these would put the European Union on much better footing and is a quite unproblematic way of dealing with any structural issues in their economies.

That does not necessarily mean that you need a full-time job, or any real (=moneyearning) job at all.

As an anecdotal evidence, my grandfather is currently 84 and can still outwit his son (45). The simple reason: He is still very active, has mutiple hobbys, is giving a lot of advice to his family and so on.
He has not worked to earn money for ~20 years but is in no way senile.

There are a lot of possible activities in the community can and are done by elderly people.
Most voluntary activties that are normally done by people in the parental age could instead be done by elderly people
(with the obvious exception of physically straining activities).

I worked at a kindergarten for ~4 months, and we actually had multiple grandparents helping out.
You see, the kindergarten worked like this:
We had 3-4 professional kindergarteners, and 2-3 parents keeping an eye on the children.
Since the parents were only there to aid the professionals, they job could be easily done by grandparents, too.

Obviously, this is getting more and more difficult the further the physical decay advances.
But that does not mean that there are no possible activities for physically fit seniors.

Regards
Fina

[Tiriol]

I see no real problem with the idea that the welfare systems in Europe need an overhaul. They are, for political reasons, geared heavily toward pleasing elderly people, which is foolish. The elderly should be cared for primarily for their relatives, and the vast entitlements they are given under European social nets should be sharply curbed. Furthermore, the entire concept of retirement is a ludicrous one, created only by the economic surpluses of the 20th century, and should be accordingly curbed. Many of the conservative objections to the welfare system over the performance of the European model would, I suspect, fall flat if merely that countries like France and Germany began providing the same protections to the elderly that they provide to anyone else, instead of vast additional entitlements delivered to those who no longer work. The first thing to do to start is to tie the retirement age to the average age of death, I think 75 would be a pretty good figure.

We have substantial evidence that when people stop working, their brains just rot from a lack of use anyway, and they quickly become senile. So the myth of retirement, ultimately, is just that, and in Europe the amount of vacation time and support one receives on the job and the strict labour laws means that you can enjoy life while working. Ergo, no real purpose for the low retirement ages they have, and the vast retirement perks that the European states support. Shaving through these would put the European Union on much better footing and is a quite unproblematic way of dealing with any structural issues in their economies.

Of course, you would actually have to sell these reforms to the population at large and there aren't too many who would accept them. After all, why bother paying for pension if you won't have chance to enjoy it, because the age of retirement is set so high? And the elderly do consist of a major voting force. And as Knife pointed out, if the amount of jobs available stays the same but the older people stick to the work force, the competition will become that much more fierce and the younger, more inexperienced people will suffer for it and the youths and young adults' unemployment numbers will soar.

And while European labor laws and vacation time etc. seem nice, the truth can be different (although it doesn't have to be): the current economic hardships have shown it quite clearly with people afraid of using their vacation times, calling in sick etc. Why? Because they fear they will be downsized or cast in a bad light in the eyes of the employer, who might just shaft them later on. Many work unpaid overtime and the support on the job depends much on the job itself. The letter of law and rules may state something, but sometimes the employees are not even aware of what they are actually entitled to and sometimes they are simply too fearful of losing their jobs to use those perks (or sometimes, even if they do, for example, call to their labor union or union represantive, they [union & represantive] might be overworked and -booked already).

Europe is no fairy tale land; while it is better in many aspects than USA, it does have its darker side and the basic human greed is still a strong element.

[Samuel]

if the amount of jobs available stays the same but the older people stick to the work force, the competition will become that much more fierce and the younger, more inexperienced people will suffer for it and the youths and young adults' unemployment numbers will soar.

And then wages will drop increasing the pool of available jobs because workers are cheaper.

[Fingolfin_Noldor]

We have substantial evidence that when people stop working, their brains just rot from a lack of use anyway, and they quickly become senile. So the myth of retirement, ultimately, is just that, and in Europe the amount of vacation time and support one receives on the job and the strict labour laws means that you can enjoy life while working. Ergo, no real purpose for the low retirement ages they have, and the vast retirement perks that the European states support. Shaving through these would put the European Union on much better footing and is a quite unproblematic way of dealing with any structural issues in their economies.

So... how do you guarantee the job market can accommodate more people? As it is, it's hard enough to employ the multitude of college graduates, let alone the retirees.

[Dartzap]

We have already seen the effect of having people working past retirement age here - jobs that would typically have been taken by students in the retail sector have been yoinked by those who did not pay into pension funds (B&Q, Woolworths pre-going-bust) and the like all had above average numbers of older people in the lowest paid positions and leaving the majority of younger people hung out to dry and forced onto the doll.

Which is why I spent several years doing voluntary work before I managed to get my job, it didnt pay anything, but atleast I was getting actual experiance in the sector I wanted (this applies to both this thread the Lost Generation thread as well) and I'm now hopefully going to be able to expand my skills to get get further up the greasy poll in the coming years.