Teemu, I just heard on the radio that Chirac signed the subject bill into law; although he modified the portion under discussion. He lowered the period from 2 years to 1 year and added a proviso that an employer must have a reason for laying an employee off. What US corporation do you work for? Does it need to meet the same worker requirements as everyone else in Finland? Presumably so. Why do they have a problem competing in the global market? Italy a basket case? I mentioned reading Oriana Fallaci's The Rage and the Pride. I'm now reading her follow-up book, The Force of Reason. She describes most of Europe as being a basket case. Lawrence -----Original Message----- From: lit-ideas-bounce@xxxxxxxxxxxxx [mailto:lit-ideas-bounce@xxxxxxxxxxxxx] On Behalf Of Teemu Pyyluoma Sent: Friday, March 31, 2006 1:59 PM To: lit-ideas@xxxxxxxxxxxxx Subject: [lit-ideas] Re: Are you out there, Didier? Lawrence, the current problems with European economy are about German, French and Italian economy. Italy is a different basket case, but German and French corporations in general seem to have no problems competing in the global economy, it is the domestic demand and consumer economy in general that is the problem. I also have to note that the companies having trouble competing in the global market place are more often than not big US corporations, something that gives me no satisfaction as I work for one. I have a cultural explanation for this and in a nut shell it boils down to amount of red tape that makes Russian bureaucracy look efficent... But that is beside the point. As Munchau, an editor in an economically right-wing business paper, notes the Villepin proposal is economically and politically counter-productive. It is very hard to see how it would create new jobs, as it applies to only those under 26. The kind of economic havoc further strikes will cause will certainly out do any benefits. And anyway it has mainly to do with goverment jobs, private sector can and does fire people too in France I believe. The political price is far bigger. As much I dislike the conservative left, I have even bigger problem with dimwit reformists, namely because I symphatize with their aims. We've got this cheerleader crowd who reflexilevely supports any kind of measures to lower employment protection, whether they work or not. Lay-off periods, severance packages and so on are basically part of compensation given to the worker. From an employer perspective, that you have to pay say six months salary to someone you fire has a cost of the propability you me indeed lay him of multiplied by six months salary. That we should in effect, given alreay week domestic demand, effectively lower wages doesn't seem particullary good for anyone involved. And increased insecurity leads to excess savings, see China and US current account deficit, which leads to deficent demand. I am in favor of the Scandinavian model, that does seem to lead to very high employment, that is you protect workers and not jobs (this is part of the general concensus Blanchard outlines). High unemployment benefits coupled with both reguirement to seek a job, and help finding it, and if needed training. The continental model of making lay offs hard simply gets the problem wrong, that people loose jobs is not that bad, that they can't find another is. But the current French proposal doesn't really address this in a meaningful way. Cheers, Teemu Helsinki, Finland