Woody Allen might now commonly be referred to as a “veteran film maker” but I remember him as a neurosis ridden comedy turn in his own films such as “Sleeper”, “Everything You Always Wanted to Know About Sex * But Were Afraid to Ask” and of course the marvellous “Annie Hall”. However, before his film career began, he had come through the tough school of American stand-up comedy. It was there that he delivered one of the greatest comedy lines ever which was “I was trying to do to this girl what President Eisenhower is doing to the country”.
How could I not have been reminded of that one while watching French President Francois Hollande during his New Year set piece presentation to the press. I’m sure Woody Allen would be charmed to think that France’s top man is apparently doing both bits even though one half of the equation – the one most of us, having seen the photos, can sympathise with even if we don’t approve – is already discreetly being pushed to the side-lines.
Alas, nothing has been decided and nothing is writ in stone but what Hollande delivered yesterday was nothing less than a master class in talking for an hour while saying nothing.
So there he stood in front the assembled press gang and delivered the most woolly and meaningless discourse on the state of the economy and on what he, the President, aimed to do about it. Hot air, 10, substance, nil. I hate French (and other) politicians’ meaningless “Something must be done and something will be done” speeches which mean little and achieve nothing but Hollande has history on his side. For many decades France has been in and out of the social and economic intensive care department but time and again, just when it looked as though structural reform was finally unavoidable, a reversal in the fortunes of the global economy has bailed it out and the much heralded up-dating of superannuated social and labour legislation was avoided.
Given yesterday’s upward revisions by the World Bank in global growth expectations for 2014, he might actually get away with it. It has raised its forecast for global GDP growth from 3% to 3.2% – it reckons it was 2.4% in 2013 – and growth in the industrialised nations to 2.2% from 2%.
There is of course no specific mention of France and most of us would suspect that ex-France growth might be higher but the French are an emotionally fickle bunch where collective, near nihilistic depression can swing to rampant optimism at the drop of a beret.
Malaise and jokes
Boring pragmatism has never been the French way – hence it is not surprising that Napoleon thought of dubbing the English as a nation of shop-keepers as being an insult whereas, in fact, I’d be thinking of it as a complement – so collective popular morale is of overriding importance. Hollande, in all his wisdom, modest as that might be, knows that it will be a Herculean task to change the way the people think and work in his country. I suspect he will take the same route as his predecessors and hope that time will be his strongest ally and that accelerating recovery in the surrounding countries of Europe and elsewhere will suffice to organically lift “La Grande Nation” out of its economic malaise.
I have been around for too long to dismiss this approach as flagrantly illusory and misguided. At +1.3% MoM and +1.5% YoY, November Industrial Production knocked forecasts into a cocked hat which then in turn far out-paced the downward revision in the October figures. It might be argued that the decline in French fortunes is levelling out and that further improvements in the broader international economic environment could help to bring it back to equilibrium or better, thus once again helping the French avoid taking all those long overdue reform decisions. They’ve done it before and I would be the last one to put it beyond them to pull it off again, despite what the rest of the world, self included, thinks of them, their labour laws and their reluctance to change. However, if they really do bounce back – bounce might be a bit strong as it will probably, if at all, be more of a crawl – then all I can conclude is that the joke will be on us.
Alas, nothing has been decided and nothing is writ in stone but what Hollande delivered yesterday was nothing less than a master class in talking for an hour while saying nothing. French bond and equity markets are today trading in line with their peers, neither better nor worse, so all I can conclude is that for Francois Hollande, it is “job done”.
Meanwhile, Japan has bounced back from its 3% decline of yesterday on the coat-tails of some staggering December retail sales figures out of the US. Cynics would suggest that the US is busy building the new house without having properly cleared up the ruins of the last one but America’s economic strength is in its short memory and ability to look forward rather than backward. Right or wrong, it’s still better to be on board and not to miss the ride.