September 30, 2022

Mediating as French Culture and Economics Collide

Just 41, a novelist who turned away from the Greens to join the larger Socialist Party, she has survived a tough first year as France’s minister of culture and communication, sitting in a chair once occupied by notables like André Malraux, Françoise Giroud, Jack Lang and most recently, Frédéric Mitterrand, the nephew of the former president.

It was Mr. Lang who said, “economy and culture — it’s the same fight,” and that has never been more true than now, when President François Hollande is struggling, against all the instincts of his Socialist Party, to bring down public spending and government debt.

Given the emotional and economic importance attached to French culture, it has always been a politically delicate job allocating the state’s largess, but it is especially tough to cut it. Ms. Filippetti has lately been deluged with criticism, much of it vague, for lacking leadership, imagination and vision. Mr. Mitterrand, who served in the center-right administration of President Nicolas Sarkozy but whispered to friends that Mr. Hollande would win the presidency, has been particularly harsh.

Ms. Filippetti “has a totally dogmatic approach to culture,” he told the newspaper Le Figaro at the end of June. “I have the sense of a dogmatic grid,” he said, especially in filling key posts at museums and theaters, which he compared to “feudalism.” The Socialists “are in denial of democracy and decide arbitrarily” on projects, Mr. Mitterrand said, while criticizing Ms. Filippetti simultaneously for an obsession with “democratizing” culture, making it more popular, which he likened to the snake in the Garden of Eden.

“The Socialists just don’t have a cultural vision,” he said. “Mr. Hollande is not interested in culture; it’s not in his DNA.”

In response, Ms. Filippetti said she found the accusations “inexplicable” and “a little sad.” It’s politics, she noted, a world of “low blows,” but “it’s a pity that Frédéric Mitterrand acts like that.” She accused him of seeking publicity, saying dismissively: “He’s preparing to launch his next book.”

Controversies over prestigious appointments come with the job. She was criticized, for example, for saying that she preferred to replace Henri Loyrette as head of the Louvre with a woman, suggesting Sylvie Ramond, director of the Museum of Fine Arts of Lyon. In the end, Mr. Hollande chose Jean-Luc Martinez, head of the Louvre’s antiquities department.

And the news media have tended to focus on her youth, her looks, her hair and her dress, and on some explicit sex scenes in her second novel.

In an interview, Ms. Filippetti asserted that she did have a vision of a more representative national culture, one that was less “extravagant,” tried to reach France’s poor and forgotten in the ghetto-like city suburbs and concentrated less on “prestige” projects so beloved by previous French presidents.

“We must radically alter this slightly too extravagant image of cultural policy, to awaken deep within all our regions an attachment to culture and the promotion of culture as a lever of economic attractiveness for our country,” she said.

Culture is an existential need and should be both protected and accessible to everyone, she said, especially given the growing uniformity of choices. “In this hour of globalization many people are lost,” she said. “We can’t find our identity alone in a silent world — it’s culture that allows the world to speak to us.” Why do people love Paris — or Florence or Venice — she asked. “Because when we walk there, the houses, the buildings speak to you.”

In the same vein, she is a fierce defender of France’s “cultural exception” — its system of quotas and subsidies for domestic production — in order to preserve “diversity” and an important French industry. France insists on excluding such subsidies from a proposed European-American free-trade agreement.

Part of the focus on her stems simply from the importance of the ministry she runs, and of the ideology behind it.

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In Her First Week, Lagarde Stresses Diversity at I.M.F.

Ms. Lagarde, formerly the French finance minister, faces the challenge of lifting the morale of bruised employees even as the fund confronts one of its greatest tests, preserving the financial stability of Europe.

On Tuesday, she held a meeting at the fund’s headquarters in Washington to introduce herself to the staff, which is still shaken by the abrupt resignation of her predecessor, Dominique Strauss-Kahn, after he was charged with the sexual assault of a hotel maid. On Friday, she holds her first board meeting to consider another round of emergency funding for Greece.

“I thought it was necessary to come back to D.C. very promptly simply because there are so many issues to address,” Ms. Lagarde said by way of introduction to her first official press conference. “It cannot wait for another summer holiday. Here I am, and for good.”

When Ms. Lagarde last met with reporters at the fund’s headquarters, during the organization’s annual spring meetings, she appeared as a representative of France and made a point of speaking mostly in French. On Wednesday, settling into her new role as an international official, she spoke exclusively in English, even when addressed in French.

She mostly dodged questions about Greece, saying that she would not prefigure Friday’s meeting, but she did provide a measure of her thinking on the fund’s mission and priorities.

Mr. Strauss-Kahn, a member of the Socialist Party in France who expanded the fund’s traditional focus on financial stability to include broader goals like reduced unemployment, argued that the benefits of prosperity did not necessarily flow to the broader populace, and that the fund needed to measure its success in terms of that broader impact.

Ms. Lagarde, by contrast, is a political conservative. She said Wednesday that people should judge her tenure by her actions rather than making assumptions based on political labels. She said that she needed time to study the fund’s policies before offering her own opinions.

But she sounded a note of caution about those policies at the outset.

“We should not become a specialized boutique to reduce unemployment,” she said, although she added that she did support elements of the fund’s current “comprehensive” approach.

“Some of the things that Dominique Strauss-Kahn has started are excellent reforms,” she said, including the “comprehensiveness that we should adopt embracing the unemployment and social issues as well as the economic trends that are more traditional.”

Much of the press conference was devoted to questions about the fund itself. Mr. Strauss-Kahn was allowed to remain atop the fund after the disclosure of an affair in 2008 with a subordinate, a decision that some considered a mistake at the time, and many more came to regret.

A number of women have come forward in recent months to describe the fund as a problematic workplace, where superiors often felt free to press subordinates for dates and little effort was made to prevent or to punish sexual harassment.

Ms. Lagarde campaigned to replace Mr. Strauss-Kahn largely on the strength of Europe’s determination to maintain leadership of the fund, particularly at a time when its primary challenge is to help the governments of Europe.

The fund was created by the United States and its allies after World War II as a lender of last resort for troubled governments. Since that time it has always been run by a European, though the United States maintains effective control.

Ms. Lagarde has said on several occasions, however, that a female executive would be an advantage for the fund, reducing what she described as the level of testosterone.

On Wednesday, she added a personal note: “For all the young girls that are in school at the moment, I’d like to say that they should each consider that everything is possible,” she said.

But she was otherwise more circumspect, speaking repeatedly about the importance of diversity.

“Together with diversity comes respect for everybody,” Ms. Lagarde continued, “and it’s been the case in the past that people have been respected and I will make sure that they continue to be respected no matter what their differences are.”

The fund has made a number of recent changes in its policies to improve its workplace culture. Ms. Lagarde’s contract includes a number of brand-new injunctions, including, “You shall strive to avoid even the appearance of impropriety.” And Ms. Lagarde noted Wednesday that she would soon attend a new ethics program now required for all employees.

Ms. Lagarde will make $467,940 in her new job, plus a stipend of $83,760, all of it untaxed.

She also addressed Wednesday widespread speculation that the fund would elevate a Chinese executive, Min Zhu, to the rank of deputy managing director.

Three people now hold that title. One of them, John Lipsky, an American, plans to retire at the end of August. But the United States is likely to insist on an American replacement.

Ms. Lagarde said the most likely solution was to name a fourth deputy.

It is, she said, “not a bad idea, and I’m going to consult in the next few days on this matter.”

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Frenchwomen Weigh Impact and Fallout of Strauss-Kahn Case

“He’s lied a lot in his life,” said Ms. Mansouret, whose daughter, Tristane Banon, has signaled that she would file a criminal complaint in France against Mr. Strauss-Kahn. “I know exactly what he is.”

“We question automatically this young woman’s testimony,” she said. “But we don’t question a man who lied extravagantly.”

Mr. Strauss-Kahn and his male allies, she said, “don’t want a world where you can’t force a woman” to perform sex acts.

For Ms. Mansouret, who for years had urged her daughter not to speak out because it might damage her career, and other women here, Mr. Strauss-Kahn’s arrest in New York in May seemed to be a turning point, a chance to break the code of silence about sexual harassment and aggression by powerful figures. But the question in France after his release without bail on Friday was whether that moment was turning yet again.

Many women took it as a pointed slap when senior figures in the Socialist Party — the mainstream progressive organization in French politics — immediately began speaking of how Mr. Strauss-Kahn might yet run for the presidency even though the felony charges against him had not been dropped.

Lionel Jospin, a Socialist and former prime minister, said Mr. Strauss-Kahn had been “thrown to the wolves” by the Americans. The Socialist legislator Jean-Marie Le Guen, who considers Mr. Strauss-Kahn to be the victim of a plot, said, “I hope he will soon be free and able to look the French people in the eyes once again.”

François Pupponi, a Socialist mayor, said Mr. Strauss-Kahn should now run for president: “Before May 15 everybody considered him the best candidate. He was accused of terrible things. If it turns out he is cleared, why wouldn’t he have the right to be a presidential candidate?”

But Sylvie Kauffmann, the first female editor of Le Monde and a former Washington correspondent for that newspaper, said that there had been a “D.S.K. moment” that would last well beyond the machismo of the political elite.

“I think he’s damaged so badly now, he won’t be able to recover in the minds of voters, especially women voters,” she said. “I wouldn’t vote for him now, but I would have before.”

There is a tendency among men “to pretend that nothing has happened,” she said. “In the establishment mind, this issue is not very important. The political class considers this issue of women and political attitudes toward women not so relevant. But I would bet that the average voter may feel differently.”

Ms. Kauffmann was skeptical about any instant revolution in sexual attitudes in France.

“But this has opened the way to a lot of discussion and debate,” she said.

“There’s an awareness and a willingness to speak out that wasn’t there before. Even if D.S.K. manages to come back and run, it will be part of the discussion,” she said. “He’s still a guy who had a sexual encounter with a maid at noon in a luxury suite before having lunch with his daughter and flying back to his wife.”

Even if the sex was consensual, as Mr. Strauss-Kahn’s lawyers say, “we’re back to the Bill Clinton problem,” Ms. Kauffmann said. “D.S.K. might be the brightest guy on the political scene, but it showed a part of his character that is a problem in a campaign and in a presidency.”

Like Ms. Kauffmann, Hélène Périvier, co-director of the gender program at the Institut d’Études Politiques in Paris, agreed that a deeper soul-searching had started about gender relations.

“It raised questions that went well beyond his particular case and that of his guilt,” she said. “People have started raising questions about the relations between men and women in France, and those questions won’t go away.”

But Ms. Périvier, like others, warned that the inconsistencies that have apparently emerged in the account of Mr. Strauss-Kahn’s accuser risked discrediting future reports of sexual violence.

Maïa de la Baume and Romain Parlier contributed reporting.

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Some Greeks Fear Government Is Selling Nation

And then comes the mandated deeper round of austerity measures, which will slash the wages of police officers, firefighters and other state workers who are protesting in Athens, and raise the taxes of citizens already inflamed by a recession-plagued economy and soaring joblessness.

After winning a pivotal confidence vote on his new cabinet on Tuesday, Prime Minister George Papandreou now has an even tougher task: to carry out a radical remedy of forced auctions and fiscal austerity for a sickened economy already in a deep slump.

The European Union, the European Central Bank and the International Monetary Fund, known as the “troika,” say that is the only way out for a heavily indebted Greece, while some economists say the program resembles medieval bloodletting — a dose of pain highly unlikely to revive the patient.

Mr. Papandreou’s first task is to persuade his governing Socialist Party to pass a bill that would save or raise about $40 billion by 2015, equivalent to 12 percent of Greece’s gross domestic product, through wage cuts and tax increases, at a time when the economy is shrinking.

To put that in perspective, spending cuts and tax increases of a similar scale in the United States would amount to $1.75 trillion, considerably more sweeping than even the most far-reaching proposals for reducing the American federal budget deficit. And Greece has promised to generate another $72 billion by selling off prime state assets, which many Greeks consider a fire sale of national patrimony.

While the commitment to austerity will allow Greece access to a fresh infusion of international aid, a growing chorus of economists say that the government’s new program will at best delay default and a restructuring of its debt, which is already more than 150 percent of the country’s gross domestic product. Steeper budget cuts and tax increases, they say, are the enemy of economic growth, which Greece desperately needs to make its debt burden lighter.

“You cannot keep on milking the cow without feeding it,” said Konstantinos Mihalos, the president of the Hellenic Chamber of Commerce in Athens.

In fact many economists fear Greece has already entered a “debt trap,” where paying the interest on its mound of debt requires more and more loans. “The Greeks have been told to accept more of the medicine that has already failed to treat the disease,” said Simon Tilford, chief economist at the Center for European Reform in London.

The Greeks have already reduced their deficit by five percentage points of the gross domestic product, “unprecedented cuts in a modern economy,” Mr. Tilford said. “But the cuts have had a much stronger negative impact on the economy than the troika imagined, and fiscal austerity has pushed the economy deep into recession. Debt can only be paid out of income, and that means growth.”

Greece does not have access to many tools to fight recession, like devaluing its currency or cutting interest rates, at least as long as it remains a member of the euro zone. Its monetary policy is controlled by the European Central Bank.

Some independent economists accept that Greece has no choice but to try a fresh round of cuts. Edwin M. Truman of the Peterson Institute for International Economics in Washington said Greece had to go through more pain because it had run a budget deficit even before making payments on its debt, meaning it needed loans to pay off its loans.

Only after Greece reorganizes its budget, tax collection and labor market and is running a surplus — not including interest payments on the debt — can economists begin to calculate how much in debt payments Greece is actually able to afford, and then figure out how big a debt restructuring it needs.

“As long as they’re running a primary deficit, they need to keep tightening the belt,” Mr. Truman said. “Rescheduling now doesn’t relieve Greece of the burden of fixing the economy to create a surplus.”

Rachel Donadio reported from Athens, and Steven Erlanger from Paris.

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U.S. Stocks Tumble as Concern Over Europe’s Debt Crisis Heightens

Treasury prices and the dollar rose. Asian and European shares were lower after developments in Greece, Spain, and Italy refocused attention on the euro zone’s fiscal uncertainty. Manufacturing statistics released by Germany and China were softer than forecast, raising the prospect of slower growth in Europe and in China, which has the world’s second largest economy, and unsettling investors.

“It is a bit of a risk-off environment right now,” said Eric Viloria, senior technical strategist for “Markets are risk averse, and the U.S. dollar is benefiting.”

In afternoon trading, the Dow Jones industrial average was down 124.80 points, or 1 percent, at 12,387.24. The Standard Poor’s 500 stock index was down 15.01 points, or 1.1 percent, at 1,318.26, and the Nasdaq was down 41.06 points, or 1.5 percent, at 2,762.26.

Most market sectors tumbled more than 1 percent, including energy, materials, industrials and information technology, tumbled more than 1 percent.

The Nikkei index fell by more than 1 percent and the Hang Seng was down by just over 2 percent. In Europe, the CAC 40 closed down by 2.1 percent, the DAX in Germany was 2 percent lower, and the FTSE ended the day down by 1.9 percent.

Analysts said recent news from Europe has not instilled confidence in the continent’s ability to handle its fiscal challenges. Last week, Fitch Ratings said it downgraded Greece’s credit ratings by three levels to B+, a rating that is below investment grade. Standard Poor’s lowered its outlook on Italy’s debt to “negative” from “stable” over the weekend, citing lower prospects for the country’s ability to trim its debt and because of a weaker outlook for growth.

And Spain caught headlines after its Socialist Party lost on Sunday in regional and municipal elections as tens of thousands of Spanish protesters, their anger partly fueled by the debt crisis and joblessness, are trying to force an overhaul of the political system.

Declines in Asia’s markets followed the HSBC preliminary purchasing managers’ index reading, a gauge of the manufacturing sector activity, for China, which fell to a 10-month low of 51.1 in May, according to news agencies, signaling a slowdown in expansion. Still, the Chinese government is poised to continue fiscal tightening. A similar gauge for Germany dropped to 54.9 in May, below forecasts.

Bruce McCain, the chief investment strategist of Key Private Bank, said the signs of weaker economic activity in China were counterbalanced by high inflation, with the possibility that they will have to continue to raise rates.

In Europe, he added, “not only are they again grappling with the sovereign debt issue, but inflation remains uncomfortably high and they seem determined to raise rates again.”

He said that although the overall picture was not “the best of outlooks,” the markets appear to have discounted the worst and economic improvements are in store.

“We would not throw in the towel yet,” Mr. McCain said.

The European Commission said in a recent forecast that prospects for this year looked “slightly better” than six months ago, but that the rate of recovery would be uneven across the 17-nation group, with continued concerns about inflation and joblessness.

Concerns over Europe reawakened the potential for oil demand to decline, causing crude prices on Monday to slip.

Treasury prices rose on Monday. The yield on 10-year Treasury notes has fallen by over 40 basis points in a little more than a month, from just under 3.6 percent to about 3.15 percent, analysts noted.

In the United States market, investors are juggling economic concerns as food and energy prices rose, although corporate results have been mostly stronger than forecast. Also on the horizon is the end of the Federal Reserve’s program to buy $600 billion in Treasuries, also known as its second round of quantitative easing, or “QE2” in market jargon.

Steven Ricchiuto, the chief economist for Mizuho Securities, USA, suggested that the domestic financial markets may “trade sideways” for an extended period, as the continued deterioration in the European sovereign debt crisis largely offsets the lowering of the outlook on the United States credit rating to negative by Standard Poor’s last month.

“This decline in long-term rates was generally unexpected as most market participants had been focused on the inflation risks associated with rising food and energy prices, and the growing belief that the Fed might begin the process of tightening reserve market conditions shortly after the end of their large scale asset purchase program,” Mr. Ricchiuto said.

“Evidence of an economy not living up to the optimist’s growth expectations and speculation that commodity and equity markets would decline once the Fed stopped pumping liquidity into the system appears to have prompted this sharp shift in market sentiment,” he said in a research note.

There were also other seasonal factors to consider. Doug Roberts, chief investment strategist for the Channel Capital Research Institute, said that this was the time of year that large investors cut risk to step aside, or “go away to the beach.”

“Everybody is nervous about liquidity,” he said. “The end of QE2 is coming up and no one knows what is going to follow that.”

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