The New French Revolution

By Anne Swardson, Washington Post, Monday 31 July 2000 ; A13

PARIS—France is coming back. Literally, in the case of Gregoire Gentil.

Gentil was among the hundreds of thousands of bright young French men and women who fled for London or Silicon Valley in the 1990s because they felt their native land was hostile to entrepreneurs, business and the creation of wealth.

Gentil, 27, could have stayed in California after he completed graduate studies at Stanford University. He was making money selling Palm Pilot software on the Internet and had received employment offers from several U.S. Internet companies. Instead, he returned in 1998 and before long co-founded a Paris-based e-commerce site that now has 20 employees.

Things are much better here now, Gentil said. There is investment money, and the environment has really changed. If I'd wanted to start a business two years ago I would have stayed in the United States.


Many signs of the old France remain. Taxpayers fork over more than half their income to the government. The unemployment rate is barely below 10 percent. Strikes and demonstrations still slow Paris traffic and the pace of reform. Many people have not experienced the advances in living standards of the last few years.

But it's the new France that's caught the national imagination.

French corporations have gone increasingly international. Media company Vivendi's recent $30 billion announced purchase of Seagram Co. and its Hollywood studios was just the most recent example. Air France and France Telecom, long owned by the government, have been partially sold to the public. The economy is booming (by European standards), projected to grow 3.5 percent this year, faster than Germany and Italy.

France's multicultural, multiracial national soccer team won the World Cup in 1998 and the European Championship this summer, an unprecedented double victory that went far beyond sports. Many say the resulting surge of hitherto-unusual national pride and enthusiasm helped bring the country out of years of apathy.

France's citizens are increasingly plugged in to the Internet, even although just a few years ago officials were calling it a conspiracy to force everyone to speak English. More and more French people also invest in the stock market, once frowned upon in a traditionally risk-averse culture.

Perhaps most important, people are backing away from old notions that France's government is the rightful center of all power and the solution to all problems. Instead, the general tenets of what has become known as globalization are becoming accepted here: Trade and business are good; wealth is created by private businesses, not government; technology is a force for progress.

The change is not just about business. It's about optimism. In 1996, countless newspaper articles and magazine cover stories talked of moroseness and malaise. One major magazine asked on its cover: Is France in a state of failure? Today, cover stories are more likely to be on Internet startups or where in the new economy to find a job.

France is in the process of changing beyond recognition. It is, in fact, blossoming, wrote Dutch journalist Marc Chavannes in his recent book France: The Hidden Revolution. The windows have been opened and the outside world is blowing in.

Few believe France will turn back. Basically it can't. Because it has opted to use the euro, the new single currency of 11 European countries, its low-deficit budget policy is dictated in part by European Union headquarters in Brussels. Its low-inflation monetary policy is governed by the European Central Bank in Frankfurt, Germany. Air travel, telecommunications and electricity all have been deregulated because of EU requirements.

Pressure from the EU is only one explanation for the new France. If credit belongs to one man, it is Lionel Jospin of the Socialist Party, who was elected prime minister in June 1997. He has wended a path between the dictates of globalization and the demands of his center-left coalition in a way that has put his country on a healthier track than at any time in the last 15 years.

The situation here is not by accident. It's due to economic policy, a Jospin adviser said.

Many of Jospin's reforms have been undertaken quietly, or even in disguise. Stock options for employees in young companies were quietly legitimized last year in a law not on corporate finance but on technological innovation. They will soon be proposed for all companies, but they'll be called Vouchers for Growth. The government also will propose private pension funds, currently illegal, but they will be called Workers' Savings Plans. Officials speak of less rigid rules on work hours as providing not flexibility, but suppleness.

The French care more about symbolism than reality, said economist Elie Cohen of the National Center for Scientific Research. Our political figures will fight for cultural exceptions and the old way, but in reality they privatize and deregulate. Just don't ask the French to recognize in words what they are doing in practice. That's why Jospin is a virtuoso of linguistic innovation.

The ostensible explanation for this need for delicacy is that the Socialist Party governs with the Communists. In fact, France's political right has equal qualms about what used to be known here as savage capitalism or Anglo-Saxon capitalism. The left and the right historically have been united in viewing the state and its civil servants as best qualified to manage all aspects of society.

In most countries, there is an alliance, a partnership between government and business, a shared vision, said Ernst-Antoine Seilliere, head of France's chief business association. Here, the directors of the country are not in support of business.

Even today, advocates of the old economic model can get their way. Despite all the changes, the French government recently began phasing in a national 35-hour workweek (down from 39), a policy that is the target of vitriol from businesses large and small.

To comply without paying too much overtime, one restaurant decided to close for one week out of the month. Other companies have granted more days off or stopped counting lunch hour as work time. Sema Group, a large information technology company, gave its France-based employees another six days a year off. We'll survive the 35 hours, said chief executive Pierre Bonelli. But it was just an election promise that had to be kept. No one in the government believes in it—except at the labor ministry, he added.

At that ministry, one of the law's most important implementers was Nicolas Veron, 28, a rising star in France's prestigious civil service. Then he left. Today, he's vice president for business development at a French Internet company called Multimania. On his desk is a laptop computer, a copy of the Economist magazine and a book, in English, about venture capital. He won't say how long his workweek is, but admits it far exceeds 35 hours.

For me, the motivation was not financial. It was that I wanted to join the Internet movement, he said. In France, the ‘royal way’ is no longer civil service or big business, it's creating companies.