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Entitlements

THE BALTIMORE SUN

WASHINGTON -- The strikes that have paralyzed France's rail, road and air traffic for weeks are still spreading -- from transportation to teachers unions, garbage collectors and broadcasters and other state-owned and -operated industries from Paris to cities and towns throughout the country. The end is not in sight.

Concessions offered by the government have served only to redouble the strikers' determination to settle for nothing less than victory: defined as the government's withdrawal of the whole package of economic, social and fiscal reforms. Union leaders are adamant in their opposition to Prime Minister Alain Juppe's proposed reforms.

In fact those reforms are common enough in this last decade of the 20th century. They are imposed by the IMF on countries in financial crisis. They are adopted by industrial countries whose leaders seek to stimulate growth and make their countries more competitive. In the United States "the Republican revolution" headed by Newt Gingrich is moving in the same direction to cut the welfare state; in Britain "the Thatcher revolution" performed part of the same task in the '80s.

The problem, of course, is that these reforms require painful cutting into the "entitlements" of modern welfare states -- reducing anticipated benefits, extending years of work, cutting public health services, giving up some of the social protections and economic rewards won in previous struggles.

The welfare state

No people have won more benefits and achieved more protections against the uncertainties of unemployment, age and illness than the French -- whose public sector is the largest in the Western world, whose health insurance is the most comprehensive, whose system of public education is the largest and best, stretching from day care for infants to superb professional and advanced post-graduate educational institutes. Until now the French welfare state has avoided major cutbacks.

One reason is that the French expect the state to be powerful. Another is that the Socialist President Francois Mitterrand, who served from 1981 to 1994, expanded benefits and protections at the time others were cutting them. The consequence was unparalleled security, progressive economic stagnation, declining competitiveness and rising unemployment.

President Mitterrand undertook no reforms. He did, however, continue building the foundations of the European Union through participation in drafting and ratification the Maastricht Treaty. He also put France on the road to the European Monetary Union, now scheduled to begin in 1999, and thus pointed out a different route to needed reform. The EMU gives the French people a new reason for agreeing to take medicine that tastes bad but is good for you. They want to be part of "Europe."

Single currency

The European Monetary System foresees a single currency and a single monetary policy and promises its members a strong, stable currency. Virtually all the architects of the European Union -- including Jacques Delors -- see monetary union as the centerpiece of the new Europe. So they have accepted German views on strict "conditions" of membership, conditions which require greater fiscal austerity and sacrifice than are customary in European and other countries.

These conditions include budget deficits of no more than 3 percent of gross domestic product, a national debt that does not exceed 60 percent of gross domestic product, a low inflation rate. Prime Minister Juppe wants France to make it into the EMU at the beginning.

His reforms will shrink the generosity of France's welfare state -- cut the pension system that permits railway workers to retire at 50, extend the age of eligibility for social-security pensions from 60 to 65, increase the required years of work, reduce the benefits in France's sweeping health-care system under which the state pays for all doctors, all medicine, all hospitalization and convalescent care.

Under France's Gaullist constitution (written by Charles De Gaulle and associates in 1959) President Jacques Chirac has broad powers. So does a prime minister, if like Mr. Juppe he is of the same party as the president and has a majority in the parliament. Mr. Juppe can simply push through the reforms he deems necessary to prepare France for entry into the EMU. He will probably do just that.

But the unions and their members are imposing a price. So are the voters -- who just defeated five of seven government candidates in by-elections. Each group is protesting in its own way against Mr. Juppe's planned attack on benefits they hold dear, much as U.S. public-opinion polls reflect the declining popularity of Newt Gingrich.

The politician who takes on the entitlements of the modern welfare state risks his political life, especially, if -- like the House Republicans -- he must face the electorate soon after.

Alain Juppe's term runs another four years, so for him electoral defeat is not imminent. However, the French, who have a tradition of political strikes, will find other ways to express their discontent if he is not soon able to calm their outrage and get the garbage collected.

0 Jeane Kirkpatrick is a syndicated columnist.

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