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JOHN LICHFIELD

OPINION: An inflation ‘tsunami’ is about to hit France

The rise in the cost of living in France is among the lowest in Europe - but that does not mean that it's not already causing pain to consumers, and much worse is set to come in January, warns John Lichfield.

OPINION: An inflation 'tsunami' is about to hit France
Photo by Christophe SIMON / AFP

There are lies, damned lies and official inflation figures. According to the official index, the cost of living in France has risen by 6.2 percent in the last year. If you limit that to food prices alone, the figure rises to 10 percent.

No more? It depends how you count and what you count.

A typical “supermarket basket” of 38 of the most used household items – fish-fingers, shampoo, crisps – cost 16.5 percent more at the end of September than 12 months earlier (according to a survey by Le Monde) .

Cooking oil, according to a government survey, is 60 percent higher than it was a year ago; frozen fruit is up by 40.6 percent, margarine 23.5 percent and flour by 23.5 percent. Terrible news if your favourite “French” dessert is “un crumble”.

The official inflation figure of 6.2 percent (the highest since 1985) may be misleading but it is not wrong. It is held down by rents, domestic energy prices and clothes, which have not risen as much as food.

The French government has spent €150 billion – 5 percent of GDP – in the last year to keep down the cost of electricity, gas, petrol and diesel. This mostly explains why inflation in France is so much lower than other countries. Prices are rising at 11.1 percent in the UK, 10.9 percent in Germany, 12 percent in Belgium and at an 8.5 percent average across the European Union.

READ ALSO How France is keeping its inflation (relatively) low

However, France faces a double shock or delayed reckoning in the New Year – what one senior government official describes as a “waterfall” and what Michel-Edouard Leclerc, head of the E. Leclerc supermarket chain, calls a “tsunami”.

The state subsidies on petrol, gas and electricity cannot be afforded indefinitely and are being wound down. Petrol and diesel rebates have already been reduced and will vanish from January 1st. Instead there will be targeted subsidies for poorer families and those dependant on cars for work.

The big price-totems outside filling stations and in supermarket car-parks – a better guide to the gloomy provincial mood than opinion polls – are already showing petrol and diesel at over €2 a litre.

The government’s 2022 freeze on gas prices and the 4 percent cap on electricity bills for households and small businesses will also disappear at the end of next month.

From January, energy price rises will be limited to 15 percent – still much lower than in other countries.  Unfortunately for the government, French people do not compare their power bills with those of “other countries”.

Food price inflation began with the post-Covid boom and was worsened by hot, dry summers and the Ukraine war. It has been lower in France than in other places. A government report this month found that – far from price gouging – the French farming, food and retail industries have been cutting profit margins to prevent consumer prices from rising even higher.

Unfortunately for the government, French shoppers do not (except a very few) look at supermarket prices elsewhere. Faced with a €120 shopping bill that once cost less than less €100, they tend not to say: “Thank God, we are not British or Belgian or German”.

This is what the senior official means when he warns that the country is paddling towards a “January waterfall”. The government had hoped that market prices for petrol and diesel would have fallen by now – compensating for the loss or reduction of state subsidies. They have not.

Electricity and gas bills will shoot up by 15 percent in the New Year – just as France faces the prospect of selective power cuts. Repairs to its ailing fleet of nuclear power plants remain behind schedule.

EXPLAINED What your French energy bills will look like in 2023

Leclerc also warned on Monday that a “tsunami” of new food price rises lies ahead. Inflation was being “normalised”, he said – in other words producers were unwilling to cut their margins indefinitely. A spiral of higher costs and higher prices was being built into the system.

“Felt” or everyday inflation is mostly food inflation. The poorer the family or the individual, the bigger the share of income spent on food. The government has also tried to soften the impact of high prices on the poor. Apart from the energy subsidies, it sent a €100 “cheque” to all households on low or modest incomes this Autumn.

Unfortunately for the government, memories are short and supermarket prices are high – €100 does not go very far when the price of flour and fish-fingers is rocketing.

When power bills explode and food price spike this winter who will thank the government for sparing France the worst of inflation in 2022?

An opinion poll this week found that 89 percent of French people were miserable about their immediate future. France, unlike other countries, does not do passive gloom for long.

Troubled waters, whether a  “waterfall” or a “tsunami”, lie ahead. 

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JOHN LICHFIELD

OPINION: Which side would Le Pen be on in World War III? French history gives a clue

When I interviewed Marine Le Pen a decade or so ago - writes John Lichfield - I asked her a would-be clever question: 'If you had been alive in June 1940, who would you have supported, Charles de Gaulle or Marshall Pétain?'

OPINION: Which side would Le Pen be on in World War III? French history gives a clue

She hesitated (considering all sides of the trap) but then said: “My instinct would have been to be with De Gaulle and the Resistance”.

Le Pen rapidly changed the subject. She didn’t want to dwell on the Nazi occupation of France in 1940. Instead, she made a spurious comparison with the alleged 21st century “occupation” of a handful of French streets for Friday Muslim prayers.

All the same, it was telling reply. She had repudiated her father, Jean-Marie, and other founders of the Front National who detested De Gaulle and sympathised with the Nazi-collaborating Vichy regime.

To relaunch and expand the family business, Marine Le Pen realised that she must abandon her father’s implied but never-quite-stated belief that “The Wrong Side” had triumphed in 1945.

Le Pen has since gone much further in de-toxifying the Front National, including changing the party’s name to the Rassemblement National and ditching her papa completely

In France, however, history is buried in shallow graves. World War Two caught up with Marine Le Pen last week.

President Emmanuel Macron had suggested that she should, in all decency, stay away from the state ceremony for the transfer of the remains of a foreign-born, Communist, Resistance leader to the Panthéon, the resting place of France’s official heroes and heroines.

Missak Manouchian, arrested and executed in February 1944, was a one-man affront to the founding genes of the RN, ex-FN. He was a Communist who led a resistance-cell largely composed of Jews. He was an immigrant who gave his life for his adopted country while the ideological ancestors of the ultra-nationalist Le Pen collaborated with the invaders.

READ ALSO Who was Missak Manouchian and why is he important to foreigners in France?

Like the wicked fairy in Sleeping Beauty, Marine Le Pen insisted on going to the Panthéon all the same. She had, she said, the same duty as any other party leader to attend a ceremony for a national hero (even if he was a lefty immigrant).

By a quirk of events, the murder in prison of the Russian opposition leader Alexei Navalny simultaneously confronted Le Pen with another question. On whose side would she be on in World War Three?

Marine Le Pen is a long-standing admirer of Vladimir Putin. Her party was until recently his client for a €6 million loan.

During the 2017 French election, a young Russian artist presented her with a triple portrait of startlingly vulgar post-Soviet kitsch. It showed three blonde, Aryan heroes gazing portentously into the distance – Putin, herself and Donald Trump.

The RN made a great fuss of the painting at the time. Little has been seen of it recently.

Since the second Russian invasion of Ukraine two years ago, Le Pen has distanced herself from Putin. The RN paid off its loan last year (and took out another one with a bank linked to the pro-Putin, Hungarian Prime Minister Viktor Orban).

Like Donald Trump, however, Le Pen remains unwilling to break with the Kremlin completely. There was something sickeningly limp about Marine Le Pen’s statement on the murder of Navalny last week.

“I learn of the death of Alexei Navalny, a political activist engaged in the defence of democracy,” she wrote. “My condolences to his loved ones and his political family.”

No outrage. No mention that he died in a punishment camp in Siberia. He might have been an obscure old man who had died at home.

Contrast the statement by her young party president and de facto Number Two, Jordan Bardella.

“Alexei Navalny died in an Arctic prison where he was serving 19 year sentence for opposing the regime. This is tragic news for all defenders of human rights and fundamental liberties”.

That statement also stinks of hypocrisy. RN members in the European Parliament, including Bardella, have consistently failed to support motions condemning Navalny’s persecution. The Rassemblement National is keen to dismantle human rights in France and the EU.

But at least Bardella was prepared temporarily to put aside the latent Putinolatory of much of French far and hard-right and speak of an act of authoritarian wickedness.

At the time of the first anniversary of the Russian invasion last year, Bardella had already tried to toughen the party’s weaselly words on Putin’s responsibility. He was slapped down by Le Pen.

Despite his vacant boy band good looks, he is a clever young man. He no doubt sees Marine’s reluctance to break completely with the Kremlin in the same way that she once saw her father’s refusal to repudiate Vichy – an irritating PR obstacle in the march to power.

France and Europe may not face World War Three in the near future but we do face a long and painful struggle to continue support for Ukraine. The quislings and the Vichy-sympathisers are already amongst us. Not all the pro-Putin readers’ comments in Le Figaro come from Russian troll factories.

On whose side will Le Pen and Bardella be when difficult choices are needed in the months ahead?

In World War Two those who had brayed most about love of patrie and the ‘foreign menace’ proved to be those most willing to collaborate with and exploit foreign occupation.

Le Pen has stolen a march on them. She has shown herself willing to collaborate with Putinism in advance.

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