France’s credit rating is not at risk, its budget minister Francois Baroin said today. Everyone in Paris is therefore convinced this has become an eventuality. France enjoys a top AAA debt rating, although nobody here is entirely sure why: the annual deficit has been off-limits ever since the Euro’s launch, and it continues to grow steadily. There was little doubt in most official minds earlier this month to whom Angela Merkel was really referring when she mentioned the ‘regular fiscal indiscipline’ of certain members.
M. Baroin told RTL radio that France is still a safe haven for lenders seeking a reliable government borrower, but there is a growing feeling among such lenders that – certainly in the West – reliable government is an oxymoron. In Britain we realised the necessity of treating every Government as utterly unreliable round about 1990, and sovereign lenders are these days equally unwilling to believe much of the fantasy that emerges from european treasuries from time to time.
“Some of us think they just lie” said one to me last week, “but my own view is that they don’t have a clue what’s going on”. So I thought of that person this morning when the Caisse Nationale d’Allocations Familiales announced that their previous benefit-fraud figures had been a gnat’s out here and there.
It seem that the total of all those committing benefit fraud in France is 20 times greater than initial estimates – and the cost to the system is 10 times bigger. They’re both silly-big numbers, but even so the fact that 20 is twice ten suggests that (a) people are ripping off less per head than they thought and/or (b) not many French realise how easy it is to do this on a grand scale and get away with it, or (c) Gallic fraudsters still have a sense of proportion. The report (which estimates that some 200,000 people are being paid benefits to which they are not entitled) was leaked to Le Parisien. Its unsurprising conclusion was that the authorities have a “major problem with detecting fraud”. Or put less politely, civil servants know not the cul from the tete.
Its costing the Tresor Publique €800m a year – which isn’t that much actually. But don’t hold your breath waiting for a similar report into French tax evasion. The average French self-employed worker regards this activity as a national duty, and a way to remind politicians as to the reality of who’s running things.
We should think about doing more of this in England.