ARC's 1st Law: As a "progressive" online discussion grows longer, the probability of a nefarious reference to Karl Rove approaches one

Tuesday, May 10, 2005

Ahh, the French

Who thinks that the EU is economically and politically sustainable, given situations such as these?

By the way, if you don't have a subscription to the WSJ (on dead tree or online), you really should get one... here's a link to their subscription page.

At French Utility, Union Wages War To Guard Its Perks
Plan to Privatize Giant EDF Spotlights a Costly Bloat In Europe's Public Sector

By JOHN CARREYROU
Staff Reporter of THE WALL STREET JOURNAL
May 10, 2005; Page A1

PARIS -- Last June 15, two masked men marched up to French Prime Minister Jean-Pierre Raffarin's private home in western France, removed the electric meter and cut off the power.

They weren't vandals or robbers. They were employees of Electricité de France SA, protesting the government's decision to sell as much as 30% of the giant state-owned power utility on the stock market this year.

The raid was just one among hundreds of power cuts organized by EDF employees affiliated with France's powerful Confédération Générale du Travail union amid a broad strike last year. Among their other targets: the presidential palace housing Jacques Chirac, which had to switch to a backup generator, and two Paris train stations -- stranding 300,000 commuters for several hours on June 28.

The sabotage was both a testament to the CGT's clout and a sign of how much the union stands to lose if EDF, the world's largest power utility in terms of production capacity, becomes a publicly traded company. The communist-leaning union commands the allegiance of more than half of EDF's 110,000 French workers and controls the company's social-benefits council.

The council is a vast welfare machine that subsidizes meals, vacations and cultural events for EDF employees, and provides them with free health care -- all paid for with a huge budget funded by electricity consumers. EDF employees also enjoy lifetime employment, early retirement, subsidized housing and 90% discounts on their power bills, among other perks. The CGT has closely guarded these advantages for decades. If EDF is listed on the stock market, the union fears, investors will promptly put an end to them.

France's attempt to partially privatize and skinny down EDF over the objections of unions like the CGT is a test case for one of the biggest challenges facing Continental Europe: whether it can trim its costly welfare states and shed the structural impediments that have long clogged its economy. [ed - I won't hold my breath]

Across Europe, countries from Italy to Spain have for years wrestled with bloated public sectors. In France, the problem is especially acute. The country has 6.4 million public-sector workers -- more than a quarter of its work force. Like EDF employees, they enjoy gold-plated benefits and are less productive than their private-sector counterparts. The result is a bulging state budget deficit that has breached European Union rules for three years running, and an economy, the world's fifth-largest, that grew at a rate of 2.3% last year. By contrast, the U.S. economy grew at a 4.4% rate in 2004.
Hey, let's implement what the French do here!

Read the entire article... it's amazing some of the other perks that the French utility workers get (cafeteria meals priced according to their incomes, vacation resorts around the world, etc). Of course, it all comes at the expense of the French taxpayer and economic productivity, but what the heck...

Your Co-Conspirator,
ARC: St Wendeler