Greed Is Not French, Greed Is 'Anglo-Saxon'

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Meigneux / SIPA

The headquarters of the French Bank Société Generale in Paris, France.

Parisians, history attests, have never needed much provocation to take to the barricades. So it ought not be astounding that the $7 billion hit suffered by French bank Société Générale as a result of rogue trader Jérôme Kerviel's sham derivatives scheme has mobilized a small army against a new perceived foe: greed. Welcome to the frontlines of resistance to President Nicolas Sarkozy's profit-focused vision of a free-market French future.

"We've discovered the name of those who presided over the deregulation of the global finance system: Frankenstein," thundered the daily Libération in its Monday editorial. The reign of avarice began, the paper argued, when rules, restraints, and attitudes favoring the long-term greater good over short-term profit-taking were abandoned as impediments to efficiency and competition, the paper argued. "It's time for the politicians responsible for doing so to retake control of this monster."

Such indignant calls to return a bit of restraint and simple decency to the go-go universe of international markets may sound like the whining of an aging 1968-vintage radical. But they have been echoed even by some French conservatives, who see danger lurking in the excess of money saturating the business world. With France's CAC 40 index and the companies traded on it having posted successive years of record profits — putting billions in the pockets of financial and managerial whiz kids — even members of France's ruling conservative coalition parties have been openly asking why the the average French employee, whose work forms the base of all that wealth, hasn't seen a measurable rise in real income this century.

"At times you wonder whether this entire process isn't designed to leave all of us scraping by while a tiny minority gets super-rich and lives in its sealed elitist bubble," says a 32-year-old Parisian who gives her name only as Sophie — a caution based on the fact that she is an employee of Société Générale. "I voted for Sarkozy because I thought he'd get France back to work. Now it just seems like he's making the country safe for Anglo-Saxon-style excess."

"Anglo-Saxon," in the French political vernacular, connotes an economic model in which extreme inequalities in the earnings of executives and their employees are par for the course. Societies, those who use the term imagine, quite unlike France. But that may be an imaginary France. Today, the $9 million average annual salary of the CEOs of France's largest companies makes them better-paid than all of their European peers, including those in the U.K. The average French laborer — among the lowest-paid in Europe — now earns nearly 1,000 times less than the biggest bosses in the land.

And now, thanks to Kerviel's illicit efforts to make huge amounts of money quickly for Société Générale and himself, French citizens of every political stripe realize that their country's attachment to the welfare state has not inoculated them against the intoxicating temptations of "Anglo-Saxon" excess. Indeed, even Sarkozy — in his tireless lead-by-example efforts to change the French aversion to open greed (awarding himself a 150% pay increase), naked ambition and conspicuous consumption — has found himself scrambling to disassociate himself from the Kerviel taint. After initially putting public pressure on Société Générale CEO Daniel Bouton to resign — the bank's board on Wednesday rejected what it called outside political meddling — Sarko growled that he wants "capitalism of entrepreneurs, not capitalism of speculators".

The President's free-market message appears to be being mixed, lately, with some more traditional European restraint. He recently scolded Lakshmi Mittal over plans by the entrepreneur's steel conglomerate to close a mill in eastern Europe. And earlier this week, senior presidential advisor Henri Guaino warned Société Générale rivals — particularly foreign ones — that "I don't think the state would stay with its arms crossed if someone, whoever the predator, sought to take advantage of the situation".

All that contradiction gave Libération fodder for its Wednesday editorial, recounting "Sarkozy and his team are betraying their veritable interventionist nature," but welcoming it, nonetheless.

Meanwhile, members of France's effervescent Internet community launched their own offensive against creeping "Anglo-Saxon" liberalism. Since the Société Générale scandal exploded, French forums, blogs and social networks have been flooded with salutes to Kerviel for delivering a mighty blow to a financial system many commentators find oppressive and out of control as Libé editorialists. Those web pundits have variously dubbed the rogue trader "the Che Guevara of finance" and "the James Bond of SocGen" — with one charitable soul even suggesting people make small online donate to repay his losses and help him avoid jail. All that was missing were the virtual barricades.