French Government Fears 'Social Implosions Or Explosions'

Wolf Richter's picture

Wolf Richter

The daily drumbeat of layoff and plant-closure announcements in France has been riling up desperate workers who stand to lose their livelihood without much hope of finding a job elsewhere as unemployment has hit 10.5%. But now the government is worried about a “radicalization” of these angry workers. A major quandary: on one hand, the Socialists promised during the election to side with the workers; but on the other hand, they must somehow figure out how to create an environment where the private sector can survive.

And the private sector is gasping for air. The Services Purchasing Managers’ Index fell to 43.6 in January, from 45.2 in December (below 50 = contraction), the fastest rate of contraction since March 2009. Particularly worrisome was the steep decline in employment. Manufacturing was even worse. Its index fell to 42.9 in January. New orders plunged at the fastest rate since March 2009, with domestic demand the primary culprit. Employment skidded as excess capacity led companies to slash their headcount.

That these references to March 2009, the dark days of the financial crisis, keep cropping up in economic data is troubling. The report speaks of a “deepening malaise” and “a broad-based deterioration in the private sector” with “significant headwinds,” “accelerated job cutting,” and “heightened levels of uncertainty.” President François Hollande and his government should be in panic mode.

The private sector is anemic in France. Based on the 2013 budget, the central government will contribute 56.3% to the economy. The remaining 43.7% is spread over local and regional governments and finally the private sector—that is shriveling with the relentless de-industrialization of France.

Plant shut-downs and layoffs, or merely the announcement of these events often months or even years down the road, make bold headlines. Video clips of protests associated with them show up on TV, with angry men and women blocking the site. There are images of fires and mayhem. Managers are taken hostage. Politicians weigh in gravely and speak of “dialogue.” Layoffs and plant closures don’t go down smoothly in France.

A series of big-name companies, some of them part-owned by the state, has become part of the nightly layoff blues: Air France, steelmaker ArcelorMittal, Texas Instruments, Goodyear, refiner Petroplus, or automakers PSA PeugeotCitroën and Renault, whose unit sales in France had plunged 17% and 20% respectively last year. But it doesn’t stop there. Now home sales are grinding to a halt [read... The Next Shoe To Drop In France].

The numbers are adding up: in 2012, according to Trendeo, which tracks the creation and destruction of jobs in France, 266 industrial plants were closed last year, a 42% jump from 2011! Since 2009, a total of 1,087 old factories were shuttered while only 703 new ones were brought to life, for a net loss of 384 plants. And these new factories have on average 8.5% fewer employees than factories that are being shut down.

Just how deeply the government is worried about the growing labor unrest emerged during an interview on BFMTV on Tuesday. And not in a propitious location: Interior Minister Manuel Valls was discussing the hunt for Islamist terrorists in France—efforts that the government has redoubled since its military involvement in Mali—when suddenly the topic shifted to the government’s fear of “excesses and violence” during the next labor-related demonstrations.

“Social anger”—meaning, anger by unionized workers—“as a consequence of the financial and economic crisis, job insecurity, unemployment, and layoffs is here and has been rumbling for years,” admitted Valls. “But what we’re seeing today are less social movements but social implosions or explosions.”

Turns out, the government is already preparing for them. A memo to that effect, dated January 30, bubbled to the surface. Sent to regional directors of the police intelligence service, it underlines “the risks of incidents” or possible “threats to production equipment in case of radicalization of the conflict.” To get a handle on the situation, the government has instructed its police intelligence apparatus to gather information on the movements and to follow teetering companies “very closely” in order to anticipate a possible “radicalization” of the labor unrest.

Valls confirmed the police surveillance. “You have to carefully analyze it,” he said about the social anger. And that was the job specifically of the intelligence services of the police, he added. Ever the likeable Socialist, he found the right words. “We have to try to understand the reasons that push men and women into desperation,” he said. “Men and women who are in the process of losing their jobs.”

What about vandalism and destruction of production equipment often associated with these movements? “We have to try to understand them, but we cannot permit them,” he said firmly, as the interview drifted to the next topic: rising violence and property crimes against individuals.

The heightened police presence at these sites during times of labor unrest, often in unmarked cars, has the unions worried. And Bernard Thibault, Secretary General of the CGT, warned that it would be seen as a “provocation.” And so the second largest economy of the Eurozone enters into a phase where fear of a labor revolt hangs over every economic decision the government makes.

The unemployment rate in particular has become treacherous. While all countries use inscrutable statistical systems to make unemployment look better, France also has an administrative tool: removing tens of thousands of people every month from the unemployment rolls for spurious reasons. Read.... “The Politics of Removal”: Dressing Up French Unemployment

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JS1234's picture

Is there any one item in France that symbolizes all that is wrong the way the Bastille did?  Is that thing, you know, stormable? 

Meat Hammer's picture

And like the good little sheep that they are, they'll turn to the government and beg them to fix it.

hairball48's picture

What will the frogs do when all those Arabs living there start rioting and burning the country down?

JS1234's picture

They've been doing that for years.  The solution is to call anyone who notices racist.

NEOSERF's picture

Mali incursion was as much about deflecting attention from the plummetting economy and bumping military purchasing to stem Markit losses as anything.

AnAnonymous's picture

France can be a study case for the 'american' crisis as they fit so well the middle class thingie.

When looking at France, you'll see they are the 'american' middle class thing, they always have someone higher than them and someone lower than them.

For centuries now, 'americans' have milked that position by draining from both ends, stomping the lower class and leeching off the upper class.

No longer works as it used to. Good days are gone.

'Americans' in the middle.

Check the french industry: their products are more quality than some others but work force is more expensive so if you lookf for cheaper workforce, you do not go there.
Their workforce is less expensive than some others but the quality of goods is lesser than some others. So if you look for high quality products, you do not go there.

In the middle.

The 'american' epitome.

The curse of the 'americans'.

Works everywhere.

'Americans' bracketed by Jews(upper) and Negroes(under)

'Americans' bracketed by upper class and lower class


The middle position, the 'american' blessing turned into a curse.

MeelionDollerBogus's picture

'new' frenemies from 'Framerica'

puis-je avoir la roadside merde ?

trav777's picture

Idiot...there are more ethnic groups in this nation than those 3 you named.

And France's primary problem is that they imported africa to try to "fix" what they thought was a demographic issue.

They got people with NO INTEREST in maintaining infrastructure or society, just consuming it.

Gavrikon's picture

Finally, some truth.  The lamestream never gets it right.

AnAnonymous's picture

With 'americans', stuff is cyclical, they say.

I wonder how long it was since the last time this 'american' warned about social implosion in France.

More than one year ago, I stated causes why there would no social implosion in France.

Even another 'american' picked up on the remark to forecast there will be rumble in Greece if the observation was true.

Result: rumble in Greece, nothing in France.

And it can be added: more articles to come predicting social implosions in France.

It sells. And selling fantasy is so much easier than facing reality. Facing reality can be costier, much.

That is the way 'americans' are.

What are the 'americans' residing in France busy with? Dissolving themselves as French to climb up to that new dimension: European.

The only way out now for 'americans' in Europe living in countries like France.

Racer's picture

The poor are getting squeezed at every opportunity whilst the rich banksters get a tiny feather slap and 'do it again' message

For example the 'Bedroom tax' will cut benefits for those who have a spare bedroom.

and if you want to take your employer to a Tribunal you will have to fork out over £1,000!

AnAnonymous's picture

The poor are nothing but a steeping for the middle class in 'american' societies.

Shevva's picture

But, but, but the ECB promised.

lakecity55's picture

They need Drones

Haus-Targaryen's picture

French Spring would be fun to watch.  The French don't do much well, except build a fantastic tire and protest.  In Germany, especially in our car industry -- we love the French protests.  Their burning of cars makes us a lot of money! 

Gavrikon's picture

The French don't burn cars.  The third-world scum do that.

jack stephan's picture

Mr. Rzykruski: Ladies and gentlemen. I think the confusion here is that you are all very ignorant. Is that right word, ignorant? I mean stupid, primitive,unenlightened. You do not understand science, so you are afraid of it. Like a dog is afraid of thunder or balloons. To you, science is magic and witchcraft because you have such small minds. I cannot make your heads bigger, but your children's heads, I can take them and crack them open. This is what I try to do, to get at their brains!

196 countries on earth, 194 countries that lick balls.

Treason Season's picture

Met a Frenchman  about the time of the Atocha bombing in Mardid. He said if that had happened in Paris it would have been the start of a race war and people didn't realize the amount of guns the French have at their disposal.

Treason Season's picture

Met a Frenchman i about the time of the Atocha bombing in Mardid. He said if that had happened in Paris it would have been the start of a race war and people didn't realize the amount of guns the French have at their disposal.

Tango in the Blight's picture

Most of the French farmers carry firearms. That is why the French government is scared of them and usually caves in to their demands.

Agent 440's picture

Ahhh... more immigration success. Why change politicians when you can change populations?

TotalCarp's picture

Paging all the union trolls. Here is a free look into your future.

Joebloinvestor's picture

Just shows you don't fix a failing socialist state by electing a bigger socialist.

steve from virginia's picture




Nobody really gets it ... the onrushing 'fin' to modernity ... ready to hit the French like the hammer of Thor.


Wait until that hammer hits the Americans.


"All we have to do is __________________________, then everything will get back to normal." Fiddle with interest rates, sell some more bonds, bail out a bank or two, beat up some Muslims on the streets ... borrow from the Fed ...


... sell more cars, drive in circles like doomed flying dutchmen from gas station to gas station. This is what has bankrupted the country in the first place ... all of the countries.


You have to ask yourself, what does it pay, to drive in circles all day, year after year? The answer is nothing, the amounts in the tens of trillions have to be borrowed ... from Wall Street. Euro-jackasses bought the American Way and let the New York capitalists sell the rope the same jackasses are using to ... become Greece.


Hey! Guess what Frenchies? Your trip down the vespasiennes is permanent, there will never be a recovery! Never. Not in 100 million years. You idiots had a once-in-a-lifetime chance be somebody ... a contender ... instead of a bum.


"It was you, Charlie"


Only possible hope is for the entire country to get rid of the cars. No more petroleum imports, no more debts. No more Wall Street, to deindustrialize and get small. Otherwise ... small happens anyway, as unpleasantly as possible.



AnAnonymous's picture

Nobody really gets it ... the onrushing 'fin' to modernity ... ready to hit the French like the hammer of Thor.

'Americans' got it. But 'americans' have no other ways but 'americanism'

They cant switch tracks. They are focused on coming on top as things are unfolding.

There'll be no social implosions or explosions in France.

Only slow decaying.

Totentänzerlied's picture

"Euro-jackasses bought the American Way"

Your history is flat-wrong as ever.

AnAnonymous's picture

Yes it is.

They are not Euro jackasses. They are mere 'americans'

The 'american' way prevailed in Europe, with Europe largely dominated by 'americans'.

But 'americans' re no jackasses. They are 'american'. And that is enough.

Ghordius's picture

 'american'-euro-jackasses, then?

AnAnonymous's picture


'Americans' are no jackasses.

They are 'american'. And that is enough.

No sheeple among 'americans', no jackasses, no dumber than dumb either.

They are 'american'. Which includes being duplicitous.

Anusocracy's picture

Is government another meaning of the word cars?

medium giraffe's picture

ZUT ALORS! BULLISH!!1111!!111!!!! EUR/USD >= 1.40!


bilejones's picture

I loved this line

"the central government will contribute 56.3% to the economy"


The next time the State contributes to the economy will be the first.

CPL's picture

Those fields of printers bringing in the harvest.

ramacers's picture

guillotine/baskets baby. bring 'em on.

lakecity55's picture

My, this may interfere with their wine, cheese & espresso breaks.


knukles's picture

Don't see why you've footnoted that as sarcasm...

Eally Ucked's picture

And you hard working American doing what? Selling Chinese shit or running brothel 24/7, and you're so exausted of working so hard that nobody here will understand it! Or maybe you're writing programs for security agencies, or phone companies or maybe games. Maybe designing some new fucked up devices for banks or better guns and armaments? 

Totentänzerlied's picture

You have to forgive Americans (Japanese too), who, rather like Communists, and Fascists, have been inculcated since birth with the love-of-labor, the Protestant Work Ethic, transfigured into a self-contained eidolon with no relation to the Protestant god.

Tekrunner's picture

The private sector is anemic in France. Based on the 2013 budget, the central government will contribute 56.3% to the economy. The remaining 43.7% is spread over local and regional governments and finally the private sector—that is shriveling with the relentless de-industrialization of France.

Dude, I'm not going to deny that the public sector is large in France, but this statement shows that one can write a lot about economics and still not understand some basics. Yes, the number "public spending" equals 56.3% of the number "GDP", but you can't compare spending and production directly. Numbers for spending actually add the same things multiple times, because what one economic agent spends can be respent by someone else (whereas the GDP only counts things once, since it only counts added value). For example, personal spending is also equal to about 55% of GDP, and spending by non-financial companies is equal to almost 100% of GDP.

So, saying that the central government contributes 56.3% to the economy is utterly false. The private sector does contribute the most to the economy, by far, just like in any other developped country.

Tekrunner's picture

6 junks for a comment that is factually true. I guess ZHers don't like being told the truth any more than the average american.

AnAnonymous's picture

Most posters on here are 'american'.

It is well known 'americans' prefer their fantasy and propaganda over reality.

Just an exhibition of their 'american' nature.

NEOSERF's picture

Let them eat le gateau!!

THE DORK OF CORK's picture

The euro crisis is a classic labour theory of value crisis.


This is best seen in the euro car industry where factories are moving out of France to avoid labour costs as the raw material input costs are actually higher where they are going.

This expenditure of capital to avoid labour (making new factories in the east and closing down perfectly good factories in "the core" destroys more capital , driving up the cost of credit.)


No wages & now no credit in the core means the goods cannot be bought.


Indeed this process affects all industry, especially in the euro area (the euro was designed to avoid labout by any & all means)


The Strange Irish horsemeat in beef burgers scandal has in reality exposed not so much a health & safety issue but the extreme lengths employers go to avoid labour value in Europe.

Omen IV's picture

the WTO as it exists today is the vehicle for demand destruction in the developed western nations -

the devils trade of imported finished GOODS -  manufacturing jobs -  in the USA, Canada and the EEC  - was traded for the entry of the FIRE based SERVICES  in the developing world without any restrictions  - the china et al  were allowed to bring their cheap goods "without" tariffs so that the FIRE industries could have free access to their developing markets

read the AIG Story

the WTO will create the biggest social upheaval since the french revolution - it is now on an impossible trajectory everywhere  - for a tiny sliver of humanity gaining temporary advantage until the consumer markets implode  everywhere

very soon now !


AnAnonymous's picture

Very soon?

I suppose it is true for people who live thousands of years. For the others, their life time wont be enough to see that very soon.

There was no conspiracy. Only the continuation of 'american' economics.

Due to Smithian economics, it is totally natural that activity with low added value are moved to places of low consumption while activity with high added value are moved to places of high consumption.

Basically, the US will be the place for extremelly large owners. They will be surrounded with swarms of servants.

Europe, possibly, place for people with a very high position job. Surrounded by swarms of servants too.

The rest of the world: the rest of the work, moving here and there.

walküre's picture

But now the government is worried about a “radicalization” of these angry workers. A major quandary: on one hand, the Socialists promised during the election to side with the workers; but on the other hand, they must somehow figure out how to create an environment where the private sector can survive.

Stopped reading right there. Get back to me when you figure out that WORKERS are the backbone of PRIVATE SECTOR.

No private sector can thrive if workers are sitting at home or not earning a decent pay.

Totentänzerlied's picture

Call me when the workers figure out how markets actually work instead of attempting to legislate a fairytale into existence for their own benefit at the expense of everyone else. I'm not holding my breath.

The folly of the hapless worker class never ceases to amaze. Keep waiting for that social-democrat party to fix everything like they never have nor ever will.

centerline's picture

Private sector = middle class = targeted for elimination.

Accounting101's picture

So if I am a teacher, police officer, fireman or Boeing employee I am not middle class?