Magazine

What's Really Wrong In France


Please let us explode the myths about the superiority of the "American economic model" ("Crisis in France," European Business, Nov. 21). The problems in France are really small-scale, as are the potential ones in Britain, Germany, Holland, etc. -- but that does not make them unimportant. Today most of Europe enjoys a generally high level of private and public prosperity that is manifest to any objective observer. We have the means to solve the problems described if they are properly and not superficially examined.

Most of the comparative numbers you quote are bogus because of the way all European governments collect data for their statistics. Many of the allegations about our "poor" performance stem from the huge overstatement of the U.S. economy in the published numbers. The reality is quite different. Our European economies are stable and successful, and we like them the way they are.

Massive migration of those from quite different cultures and religions into our societies is causing great problems and stresses throughout the advanced world. It is therefore time we recognized the commonality of what are social and cultural problems and not economic ones. Together we might then begin to find solutions together.

Richard Graham

London

Your article describes France's current social problems as a result of the effective welfare state. The social problems are certainly serious, but the welfare state isn't the economic cause. France runs a balance-of-trade surplus and yet is subject to the tight monetary and fiscal policies applied by the European Central Bank and required by the Maastricht Treaty. As a result, France's savings become overseas balances, notably in the U.S.

Americans are spending France's savings on bigger houses and more imposing SUVs while France's youth are unemployed. Either France must make its industries less competitive and turn its trade surplus into a U.S.-style deficit or the European Central Bank must be forced to tolerate more expansion and the Maastricht Treaty torn up. At present, unemployment in France weighs unfairly on the minority population. But while the macroeconomic imbalances remain, reform can only lead to sharing the unemployment more fairly, not eliminating it.

John M. Legge

Surrey Hills, Australia Jeffrey E. Garten's "Keep boomers on the job" (Ideas Viewpoint, Nov. 14) seems to miss a critical point: Pending labor shortages in the U.S. and particularly in Europe are bound to be more than compensated for by the hundreds of millions of workers in China and India who are willing to produce high-quantity and high-quality goods at less than 10% of the cost in the U.S. and Europe. The faster both the U.S. and Europe can concentrate on high-tech jobs, which are not so easy to imitate, the better they will be able to protect the close-to-full employment of their populations, without having to resort to artificial and counterproductive measures against free trade.

Otto H. Nowotny

Basel, Switzerland We disagree with the assertion of some management experts that board members who were in place during Computer Associates' troubled years should be automatically removed ("Computer Associates: Clearing a cloud," Management, Nov. 21). The actions of Lewis S. Ranieri, who joined the board in 2001, and former Senator Alfonse M. D'Amato (R-N.Y.), who joined in 1999, have been essential to CA's turnaround.

As the lead independent director and later as the company's chairman, Mr. Ranieri played a critical role in launching the independent audit committee investigation into the company's accounting, which led to the removal of many of the company's top managers. As a member of the Audit Committee, Senator D'Amato was instrumental to the success of that investigation.

Mr. Ranieri also led the negotiations with the government that resulted in the deferred-prosecution agreement. His guidance and involvement in the business helped ensure stability during the period when the company was without a permanent CEO. Furthermore, Mr. Ranieri and Senator D'Amato were key participants in the company's efforts to attract outstanding new leaders, including CEO John A. Swainson. CA's shareholders will be well served by their continued contributions.

Dan Kaferle

Senior Vice-President for

Corporate Communications

Computer Associates

Islandia, N.Y.


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