French News in English 

Published by France Now Association

Editor: Arvind Ashta

Editorial Committee:

W. W. Strangmeyer,

Emmanuelle Ashta




(French news in English)

December 1999, Monthly, Issue No. 32

(Only highlighted issues available for on-line consultation)

This month in search of an identity

The French Mad Cows and English beef

PACS: homosexuals get tax and social advantages

DSK : Tiberi II

Conseil Supérieur de la Magistrature : The proposed constitutional Amendment

The EU directive allowing reduced VAT on labour-intensive services clears the way

Bulk Drugs versus Branded medicines

Chevènement encourages Muslims ( in a secular State with no minority representation)

World Trade Congress (WTC): The French exception

Subsidies to promote new artists

Alan Crosthwaite makes music

How I know its Christmas time


Social Security Statistics


Selling French education to India

PACS: homosexuals get tax and social advantages


Last year's brainchild, the PACS (Pacte Civil de Solidarité) is finally law. The PACS is a legal non-marital union between two adults (two men or two women or one of each). Direct ascendants, descendants and relations till the third degree are excluded from PACSing. Married people and those already in a PACS are also excluded from entering another PACS.

Since many of the Mayors were right-wing and opposed to the PACS, and to separate the PACS from a marriage, the couple will register a PACS with a Court's Clerk (greffier du Tribunal d'instance) and not at the Mayor's office (as is the case of marriage). This officer verifies that none of the parties are excluded from PACSing, before registering the contract between the two persons.

The dissolution of the PACS is immediate, if it is by common consent, by deposing a joint declaration to the Court's clerk. Otherwise, the person wishing to get out of the Union has to intimate his intention to the other person, with a copy to the Court's Clerk. Marriage of one of the partners automatically ends the PACS. In such a case, the dissolution takes three months. However, in the case of a partner getting married or dying, the PACS ends with the marriage or the death. The partner getting married must inform his PACS-mate, with a copy to the Court Clerk. If the PACS ends due to the death of one of the partners, the survivor has to inform the Court's Clerk.

The separation of assets can be done with or without the court's assistance. In fact, the big employment advantage to lawyers occurs where there is an absence of consent in dividing the assets.

To promote the use of the PACS, the government has conferred some advantages on couples entering into this form of union.

1. With effect from the third year of the PACS, the parties to the PACS can file a joint tax return for income tax purposes. This is a big tax advantage to couples who have a large difference of income between them. The advantage of filing a joint declaration ends in the year in which the PACS ends.

2. For succession taxes, the threshold for paying the succession duties is FF 375,000. Thereafter, a tax of 40% is levied on the next FF 100,000. Beyond that, the duty is 50%. This also applies to gifts with a deed between partners after two years of PACS. Otherwise, the threshold is FF 300,000.

3. The surviving partner can continue the lease of the apartment they are living in if the lessee dies.

4. The dependent member of the PACS union would get the same social security benefits as a dependent spouse of a married person.

5. To get a resident's permit, the existence of a PACS between the foreigner and the French resident, would be a criterion for consideration.

Their obligations are:

1. They have to provide material aid to each other, when he or she is in need, according to the terms of their pact.

2. They are conjointly liable for debts contracted by their partner for the upkeep of their common residence or for acquiring normal living expenditures.

3. The property acquired subsequently to the PACS is considered indivisible with equal shares, unless otherwise specified in the PACS contract.


Conseil Supérieur de la Magistrature

The proposed constitutional Amendment


Maybe the DSK case has been mediatised to draw attention to the constitutional amendment, concerning the Conseil Supérieur de la Magistrature (CSM), proposed for January 2000. There seems to be little other reason for making such a big issue of almost a non-issue. It was necessary to remind countrymen that too much political sensitivity to corruption means losing good ministers. Of course, no one is indispensable and Christian Sautter may also be a good minister and may even manage to last out his term without a scandal.

The CSM was created in 1946. Till then, the career and the discipline of judges were subject to the sole authority of the Minister of Justice. In the balance of powers, Lady Justice was clearly playing the passive role, dominated totally by the Legislature and the Executive. The CSM was a first step in changing the image of the State, considered by the French as quite corrupt, where the political actors were above all laws.

In 1958, under the fifth constitution, the link between the executive power and the judiciary was reinforced. In 1993, a constitutional amendment permitted a reinforcing of the independence of the judicial authority, but did not provide a wholeness to the two functions of prosecution and judging. The French magistrature consists of Judges (le siège) and Public Prosecutors (parquet). The General Prosecutor is a political appointment made by the council of Ministers. The CSM decides the other top promotions of judges to the major courts and also approves their nomination to other posts. But for public prosecutors, it had only a role of proposing nominees. As a result, the Minster of Justice was considered to have a big editing role in deciding which cases would be pursued and which dropped.

The new constitutional amendment bill wanted to reduce the power of the judiciary as a whole and to provide an equality of treatment to the two branches and conferring the same independence, advantages and treatment to judges and prosecutors.

For this, the original bill approved by the Parliament wanted to suppress the two separate sections of the CSM and combine them into one large section. It wanted to dilute the power of magistrates within the CSM and wanted to increase the power of the CSM by including the nomination of the General Prosecutor of the Republic to the CSM. The Senate, however, did not agree and restored the practice of maintaining two separate sections. It also excluded the Public Prosecutor's nomination. So what is finally being proposed for Constitutional amendment is a watered-down change, diluting the power of the judges and the prosecutors within the CSM.

Today, each section of the CSM comprises six magistrates (either five judges and a prosecutor or vice-versa) and six political appointments (including the President and the Minister of Justice). There is therefore a certain balance of power between the judiciary and the executive. The original bill passed by the Assembly wanted to extend the CSM to one chamber of twenty-three members, with only ten magistrates, clearly advantageous to the political wings. What is being passed is two sections with fifteen members each, but each having only six magistrates. The gain to the political wings is therefore clearly evident.

Of course, a new angle is being presented. The administrative element is being introduced. Some of the nominations are made by the vice-president of the State Council, the First President of the Cassation court and that of the Cour des Comptes, the Auditor-General. This is in addition to the Counsellor of the State Council who will continue. Perhaps it can be argued that the political section consists of the legislative and the executive and that a majority is therefore normal because these are two of the three structures maintaining a balance of power. But in such a case, perhaps the judges should be involved in approving nominations to the legislative and executive posts.

The change reflects a refusal to allow judges to bring a dose of honesty into today's political corruption. France is considered amongst the most corrupt of EU member States. The argument is that Judges have a large power to interpret laws and that conforming to Judge-made laws would go against the democratic principle of laws made by representatives of people.

The other major change is that, today, the public prosecutors are nominated by the Minster of Justice. The CSM can propose nominees, but has little further role. The prosecutors are subject to the authority and discipline of the Minister of Justice. In this matter too, the CSM has only opining powers. Under the new Bill, the CSM has to approve of the nominations of public prosecutors by the Minister of Justice. The discipline of the prosecutors is also now being conferred to the CSM. The role of the executive is therefore being diluted to a large extent. This brings the disciplinary treatment of public prosecutors and judges into line.

The proposed Constitutional Amendment also allows a transitory provision which allows the existing laws to continue till a new CSM can be formed.


The EU directive allowing reduced VAT on labour-intensive services clears the way


Twenty-two years ago, in 1977, the EEC passed a sixth council directive. This was a directive for the harmonisation of turnover taxes, especially the VAT, among member States. The basis of assessment was being made uniform, if not the rates. This would allow enterprises to understand that the system was the same everywhere and the chances of misunderstanding and the associate business risk would therefore be reduced. Since then, all VAT modifications have to move towards harmonisation.

Essentially, since last year's amendment, each country is allowed a normal rate of VAT, a higher rate and one or two reduced rates. In France, the normal rate is 20.6%. The reduced rate is 5.5%. There is also a special rate of 2.65% applied to newspapers. But the EU determines the goods and services which can be considered for a lower VAT.

For some time now, in view of high unemployment among many member States, notably France, the States have been arguing for a lower VAT rate on labour-intensive services. The stated logic is that those Member States wishing to do so should be allowed to experiment with the operation and impact - in terms of job creation - of a reduction in the VAT rate on labour-intensive services which are not currently listed. If the VAT goes down, say from 20.6% to 5.5%, these services would become cheaper, and maybe the consumer would consume more of these. The increase due to the income effect (when goods become cheaper, the consumer has more real income) would directly increase the consumption of these services as well as other goods. The increase due to the substitution effect (these goods will become relatively cheaper and preferred to other goods) would also increase the demand for labour if these services are more labour-intensive than the average basket of goods and services.

Unlike Enterprises, which can deduct the VAT on services from the VAT charged on its own goods, final household consumers bear the full VAT on their consumption. At 20.6%, this is 20.6% extra being paid. The incentive to pay cash "on the black" in return for a waiver of the VAT is high. State governments argue that labour intensive services are the ones where the producer is directly in contact with the consumer and the likelihood of transactions "on the black" is higher. A reduced VAT rate is likely to reduce the incentive for the consumer to pay cash.

Another reason is that the impact of the measure is restricted to the EU. Labour-intensive services to consumers are provided locally. A reduction in the VAT to domestically produced goods and services leads to an equivalent reduction in the VAT on similar imports. But in the case of services, especially services to consumers, the producer of the service has to be geographically present in the country where the consumer is. For the relatively small amounts paid by households, there is little point in incurring travelling costs to provide services. So, an equivalent benefit is not really being provided to foreign providers of service. From the EU's point of view, this also means that there is no distortion of competition among member-States, besides the fact that non-EU members don't gain.

In view of these arguments, the EU has now modified its directive, to allow member States to enact a reduction in the VAT charged on certain local, labour-intensive services provided directly to final consumers.

The next question is which services meet these criteria. To come to a common agreement on the services which all fifteen nations would agree to is not easy. Therefore, the EU has allowed each member State to decide which services it wants to apply this new system to. Based on the list provided by each country and the arguments backed by figures on tax losses and employment gains, specific authorisations would be provided by the EU. France, for example, has proposed a reduction in the VAT for services relating to personal care and for services relating to repairs of buildings. These proposals had already been included in the proposed French Budget for the year 2000, effective already from 15th September 1999, but modification of EU law was required. This has now been done.

EU economists are nevertheless bothered about efficiency losses caused by distorting the economy by favouring labour-intensive services. This may reduce incentive to provide capital-intensive goods, ultimately impacting research, development and innovation. Which is why the measure is being limited to three years (2000 to 2002). At the end of this period, each member State authorised to lower VAT has to provide a report on the impact of the measure in boosting employment as well as negative distortions.


Bulk Drugs versus Branded medicines


A few decades ago, when the basic medicines were copyrighted, the Pharmaceutical companies had a double advantage: only they could use the formula they had discovered and, later, they had the advantage of brand names which they could use in the OTC market (Over-the-counter: the patient goes directly to the chemist). It was only after a long period of time that smaller companies were able to win doctor approval, arguing that it was in the interest of the doctor to vary the medicine to avoid the consumer bypassing him directly to the pharmacy. Over time the educated patient learnt that they are all the same medicines and he chose the least expensive.

Now, the general medicines are being replaced by specific discoveries, less remunerative to the person who has the copyright. Over time, they lead to fewer OTC sales because the brand-name is known only to the relative few affected by the ailment. In all these cases, the cost of maintaining a brand-name (separate packaging, promotions, labelling, managing) is huge.

It therefore became clear that pharmaceutical brand-names mean little and that the marginal increase in revenue no longer justifies the extra cost in both general purpose medicines and specific purpose medicines.

It was therefore in the interest of large pharmaceutical companies to switch from branded goods to generic goods. However, it was in the interest of doctors to continue supporting unknown brands of small pharmaceutical companies. The large pharmaceutical companies obviously wanted chemists to have the right to change the prescriptions from the branded products of small chemists to generic products bulk-manufactured by large pharmaceutical companies. With the economies of scale, and the market-penetration pricing policies of large pharmaceutical companies, they are unlikely to be affected by competition from small firms in the generic market.

The government took over a role in the social security budget. The medicine sector of the social security was afflicted with deficits. In the past, the solution was to increase the contributions of working people and reduce the reimbursement of consumers. This time (June 1999), the government decreed that pharmacists should be able to substitute generic medicines for branded ones, if the generic medicine is less expensive. To protect itself from any possible fall out (deaths, illnesses) from the switch, the government made it the responsibility of the doctor to indicate that his recommendation was "non-substitutable", and to have reasons for this.

Who gains? The deficit reduces and the large pharmaceuticals benefit. What a coincidence.


Chevènement encourages Muslims

in a secular State with no minority representation


In India, all the major religions are represented in Parliament: Hindus, Muslims, Christians, Sikhs and Jains. Pertaining to a religion does not keep one out of political activity. In France, with all its education and open-minded thought, this does not seem to be so. Islam is the second religious denomination of France with more than four million Muslims, ahead of Jews who number less than a million.

Of course, a multi-religious representation in politics is just coincidental in a pluri-theistic State. It may happen in one (e.g. India) and it may not happen in another (e.g., France). In France, since 1905, secularism requires that religion keeps out of political activities. Religion is a private matter, and politics is a public matter. In public life, personal religious beliefs are not to be expressed.

The Cambridge dictionary provides the following definitions:

Secular: Not having any connection with religion.

Secularism: The belief that religion should not be involved with the ordinary social and political activities of a country.

A priori, if this definition of secularism is accepted, then the proportion of Muslims in Parliament should approximate the percentage of Muslims in the population, around 7%. Unfortunately, It doesn't seem that this hypothesis would be verified at a 99% statistical significance or even at a 95% or a 90% one. Because, there are none, I believe, from mainland France.

Why? A suggested explanation could be that the French democratic system is based on majority scrutiny. It is well-known that this system favours majorities and not minorities. As a result, minority representation is excluded, unlike the case in a proportional representative voting system where minorities would elect their share of representatives. A parallel could be drawn, indicating that it is this majority voting system which ensures that nationalists are not present in the French parliament.

The explanation is inadequate. First, why doesn't this happen in India? Second, there is a difference between the two minorities: nationalism and religious. In public life, "nationalism" is a permitted ground of opinion. As a result, if the majority in each constituency excludes nationalists, it is on explicitly clear grounds. Not so with religion. If the religion of the person is indeed inconsequential in a secular State, being merely a private matter, then a Muslim Socialist should have the same chance of being elected as a Christian one or a Jewish one. So, if there is secularism and no selection bias, political parties should normally field as many candidates from a religion as is normal based on their proportion in the population. The parliament should then have a proportional representation of all the religions.

If this is not being done, it is because "religion" does influence the vote.

This means that the French voter does not have a secular way of thinking when he elects people to public office.

This means that French law insisting on secularism does not reflect the reality of the non-secular views of its citizens.

This means that the law on French secularism is imposed on people or is a mask for some other motive.

The motive of a law can be discerned from an examination of its effect: who gains and who loses. If the effect is that the law on secularism keeps Muslims from being present in politics, the law is clearly not secular, because politics are being influenced by religion.

A different parallel can then be drawn, perhaps more appropriately, with the case of women. The percentage of women in the French population is more than half. Yet, the percentage of women in Parliament is hardly corresponding. So, France can hardly be offering equal opportunities to women.

This, the French admit. But a special amendment to the constitution earlier this year, was made precisely to attack the under-representation of women. This measure is after decades of efforts to promote their status.

What is being done for minority religions? In 1990, Pierre Joxe, the head of the Cour des Comptes, then the Home Minister, created the CORIF a council to reflect on the future of Islam in France. With the change in government, Charles Pasqua came in as Home Minister, and dissolved this council in 1993. The problem is that if the country is secular, the State also should not be intervening in religious organisation.

Nevertheless, Jean-Pierre Chevènement is thinking of getting the different Islamic groups to form a National Representative Council. To be members, each group would have to swear allegiance to a declaration of intention on rights and obligations of the Muslim religion. This declaration would include abiding by the 1905 law separating Church (or Mosque) from State. And, of course, all the Islamic groups would be allowed to practice their religion and have places of worship, providing they abide with local urbanisation laws.

But this obligation and this right the individual Islamic groups have already. So, what additional purpose does Mr. Chevènement want from such a council? If the intention is to control fanatics and terrorists, it is understandable that the State wants to promote and aid politically friendly Moslems in return for information on any anti-State activity. This is the old policy of divide and rule. Which is why the organisation of religions, including Islam, is entrusted to the Home minister.

But will there be a big enough carrot? Will the heads of a combined Islam be allowed political representation in higher political echelons?

Debate, open debate, is invited. This is possible in France now with FRANCE NOW.


Selling French education to India


The Minister for Education and Research, Claude Allègre, went to India to sell French higher education to Indian graduates. It seems that there are less than 200 Indian students in French universities out of a total of around 120,000 foreign students. Most Indian students prefer to study in the US (11000) or in UK or Australia (6000 each). Obviously, the English language is the key factor. However, it is not the only factor. While France can do little to change its language, it can examine the other factors and remedy what it can to attract more foreign students, especially Indian ones.

First, there are very few Indian academics in French universities or research organisations (e.g. CNRS). As a result, bright Indian students do not read articles by professors from French universities or research organisations. So, French universities are virtually unknown to Indian graduates.

Second, for the same reason (the under-representation of Indians in French academics), Indian students, especially those wanting to follow an academic career, see little point in battling a new language and following a course in France, if there is no chance of getting suitable employment later.

Third, the French are not even able to employ their own countrymen. With more than six million unofficially unemployed, and 2.7 million officially unemployed, it is clear that the French education system must take its share of the blame. Who wants to study in a country where the best brains cannot solve their unemployment problems?

If France is willing to recognise that it needs a more open policy with regard to key academic assignments, and a more liberal economy permitting absorption of the famous six million, then France could have a chance in attracting students from less developed countries. If, however, the closed French circuit is perpetuated, the time will come when French unemployment will cause the French to go to study in countries like India to get a chance to work and contribute there. The coterie of politicians-banks-business-media may soon find themselves talking only to each other about each other because for the others it will seem pointless to play this game.

In short, every Indian who goes back disillusioned is an advertisement for not studying in France. Every Indian who succeeds in France is an advertisement for Indians to come to France.