The World Today for April 17, 2018

NEED TO KNOW

FRANCE

Coup de Grace

French President Emmanuel Macron’s calls for overarching labor and fiscal reforms are quickly turning into a culture war, as evidenced by ongoing protests that continue to cripple French society.

After being elected on promises to liberalize the French economy and harmonize the nation’s gilded pension system, Macron has set his sights on France’s nationalized SNCF railway company as a test case for reforms.

Many French see their railway, with its modern high-speed trains and cushy unionized positions, as the vanguard of a functioning public sector, the New York Times reported.

Statistics say otherwise. Service quality is deteriorating, and the trains aren’t profitable. Even though the rail network receives some $17.2 billion in state subsidies each year, it runs an annual deficit of $3.7 billion, which has sunk the SNCF $68 billion into the red, Bloomberg View wrote, citing a recent French labor report.

President Macron attributes its problems to rail workers’ job perks. Employees enjoy lifetime employment, annual automatic salary increases, free transit tickets for their families, free healthcare and even subsidized housing in some cases. And workers can retire at age 50 with a pension that almost matches their salaries.

It’s endemic of the nation’s public sector as a whole, which gobbles up 56 percent of gross domestic product, the highest in the European Union, the Economist wrote.

Macron’s proposed reforms are by no means radical, the Economist continued. He suggests limiting perks and doing away with lifetime employment for new hires.

Even so, in protest-prone France, the modest reforms have sounded the alarm.

Rail workers have said they’ll strike on two out of every five days until June, the Times wrote. Work commutes have been severely disrupted already as a result, threatening to bring the economy to a halt.

Meanwhile, the protests have flowed over into other arenas. Trash collectors, Air France pilots and teachers have also staged walkouts in solidarity with the SNCF, the Guardian wrote. The scenes in French metropolitan areas evoke similar protests that threatened to topple governments and stalled public life in the 1960s and again in the 1990s, when other would-be reformers tried to go against the French public sector and failed.

But this time around could be different for Macron if he plays his cards right, the Economist wrote. After all, Macron’s economic reforms and promises to reboot the economy for the modern era swept him into the Elysee Palace in the first place.

For now, he’s not backing down to the union’s demands, and a slim majority of French, burdened by the disruption to everyday life, stand with the president, Reuters reported.

But if Macron is to succeed, he must have a bit of reverence for the stubborn French culture and its cemented norms. Fast-paced reforms might blow up in his face before they can drive the nation forward.

WANT TO KNOW

CHINA

No-go Zone

A US Department of Commerce ruling against China’s ZTE Corp. threatens to drive the telecommunications firm out of business.

The Department of Commerce banned American companies from selling components to ZTE for seven years after the firm broke an agreement reached after it was caught illegally shipping goods to Iran, Reuters reported.

American companies provide some 25 percent to 30 percent of the components used in ZTE’s equipment. “If the company is not able to resolve it, they may very well be put out of business by this,” said Eric Hirschhorn, a former US undersecretary of commerce who worked on the case.

ZTE pleaded guilty last year to conspiring to violate US sanctions by illegally shipping US goods and technology to Iran. But it has not followed through on an agreement to discipline 35 employees implicated in the violation – though it paid $890 million in fines and penalties and fired four senior officials.

The ruling came as the European Union failed to agree on new sanctions against Iran, suggesting the EU might not meet the US president’s May 12 deadline to “fix” the 2015 nuclear accord.

GERMANY

Walking a Tightrope

Amid news that US President Donald Trump has rejected a fresh round of sanctions against Russia, German Chancellor Angela Merkel is also walking a tightrope as she faces calls to moderate her toughened stance toward Moscow.

Germany’s Europe minister called on Monday for Merkel to ease tensions with Russia, adding to a series of similar remarks from pundits and politicians, Reuters reported.

“Anti-Russian reflexes are just as dangerous as naively… remaining silent over the nationalist-tinged policies of the current Russian leadership,” Europe Minister Michael Roth, a member of the Social Democrat party (SPD), opined in daily Die Welt.

Earlier, President Frank-Walter Steinmeier, also a Social Democrat, said that “too much is at stake” for Germany to alienate Moscow, while the German Committee on Eastern European Economic Relations, a business lobby group, urged the chancellor to protect EU firms from US sanctions against Russia.

Once committed to treating Moscow with a soft touch, Merkel has taken a gradually more confrontational approach, and took a tough line after the poison attack on a former Russian spy in Britain.

MEXICO

Costly But Clean

Mexican billionaire Carlos Slim defended a $13 billion airport project in Mexico City that has come under fire from the leftist frontrunner in the ongoing presidential race, saying the companies involved in the project haven’t found any evidence of corruption.

Presidential candidate Andres Manuel Lopez Obrador has pledged to cancel construction of the new airport terminal – which was spearheaded by outgoing President Enrique Pena Nieto of the Institutional Revolutionary Party (PRI) – and add two runways for commercial aviation at a nearby military base instead, Bloomberg reported.

Slim’s construction company won building contracts for the project, his son-in-law helped design the terminal, and his Grupo Financiero Inbursa SAB bank helped raise money for the project in a recent $1.6 billion offering of securities.

“Suspending the project means suspending the country’s growth,’’ Slim told reporters in Mexico City.

Lopez Obrador has claimed that the massive project was marred by corruption, without offering any specifics.

DISCOVERIES

Selfie Tourism

They say imitation is the sincerest form of flattery, but a businessman in Indonesia took the expression too far.

Rabbit Park, a newly opened theme park located in Bandung, West Java, has received criticism for featuring shameless rip-offs of famous international works of art, the Guardian reported.

Featuring a rabbit petting zoo and marketing itself as a spot for “selfie tourism,” the park includes several installations that appear to copy renowned artworks, such as Obliteration Room by Japanese artist Yayoi Kusama, and Chris Burden’s lampposts installation Urban Light.

Promoting itself in its Instagram account with the tagline “the way to more happiness,” the park has not given proper credit to the original artists, and has raised the ire of local artists.

“For artists who work hard for their careers, to have their works taken like that is heartache,” said Sunaryo, a local artist and gallery owner.

Art researcher and auctioneer Amir Sidharta added that the theme park “could have easily engaged many Indonesian artists, since we have many talented Indonesian artists that could have produced unique creations just for his place, and that would be much more interesting.”

The theme park has not yet provided any comment on the issue, but local authorities have offered to support to art institutions legally pursuing the matter.