It takes more than one President to awake a sleeping beauty!

During a recent taxi ride in Dubai I asked 2 French colleagues about the expectations for President Sarkozy. One colleague said “a good and promising”, his ideas seem to be well received, he constructed an administration with representatives from his own camp as well as socialists. The other colleague answered “so far yeah he is doing fine”, but I am not sure if he will succeed, the French society is a vast clan and extremely conservative, not open to change and very much sticking to the “old boys network”, or “le reseau”.

The month of January 2008 is marked by heavy weather in the international financial markets, the sub-prime crises, weak economic outlook and the fraud at French bank Societe General! Just a 5 BN Euro case, the biggest in history!
That same day Sarkozy mentioned people at the top of organizations should take their responsibility, seems logical and is common practice in almost every other country in the world. The CEO is forced to resign since he is ultimately responsible for his company. Not in France, despite the fact that the CEO himself offered his resignation, the Board decided not take any action towards the CEO. The remedy will be to install a commission of “wise man”, obviously part of the “old boys network” to investigate the causes for the fraud, which will ultimately lead to one single man, the 31 one Jerome Kerviel. Sure as if one trader can completely orchestrate such a scam on his own!

Caused by this loss Societe General is an obvious take-over candidate and indeed the very same, on January 28 the first speculations were noticed, BNP-Parisbas. Also foreign owned financial institutions are showing interest, after all France is a large country and Societe General has a respectable name. Immediately we notice real signs of French protectionism, the notion that the state will intervene and protect a takeover by a non-French institute. Such a French institute owned and governed by a non-French company will be hard to digest to this once great and beautiful nation, by the way the beauty of the country continues, hard to argue!

Sarkozy’s path to reform this country into a strong competitive global force is on hold during the first weeks in 2008. Politics continue to blend with economics, and national protectionism prevails over international competition we must respect “le reseau”!
Maybe this is only temporarily!