The Florange plant soap opera was resolved by the French government in the grotesque fashion everybody expected. That is, jobs will be preserved by investing in a costly, unproven, politically correct carbon capture project. Its total cost is around 600 million Euros, of which less than 1/3 will be paid by Arcelor Mittal (presumably a protection racket fee to deter more damaging government intrusions), 1/3 (in theory) by the EU, and another third (at least) by the French government.

This scheme will cost taxpayers 400 million euros, in order to preserve some 600 unskilled jobs. That is around 700 000 euros per job. I am sure each of these 600 unskilled workers would far better prefer a cheque of 700 000 euros, which would put them overnight in the category of the wealthiest French people (and if that amount is taxed as income they will probably have to emigrate to Belgium) rather than going on as industrial workers.

So why did not the French government instead elect to pay a severance payment directly to the workers? First, because under the current deal (which may be overturned anytime) a number of jobs will be lost, and therefore the severance payments should have been paid to other workers as well. Second, because buying out the workers whose jobs are threatened is not the game being played here. The game being played is that the government wants (like its predecessor, but to a greater extent) to show that it is capable to micro-manage the economy in order to fight “globalization” and “de-industrialization”. Why? Because a chunk of its electorate believes so, and with good electoral logic the socialist party did not tell them that it in fact never intended a frontal attack against the EU competition policy, the WTO rules, and various multinationals.

The government probably does not believe in what it is doing but it thinks that its power rests on the delusions of its electorate, which it thinks is not grown up enough to be confronted with reality. The game is to preserve those delusions at an “acceptable cost” for the taxpayer. This is why instead of an efficient severance payment which would do away with the problem once and for all, we observe inefficient discretionary public involvement into the management of a private corporation.

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