- Words: 1, 526
« If the guillotine were still around, bankers would be an endangered species! » Yves Thueux, the Toulouse primary school teacher holds bankers across the world responsible for the current economic climate affecting European countries and the substantial loss in his public pension.
« Bankers just suck money from poor people and take away jobs leading to high unemployment», the words of the 45 year-old father of two epitomizes the feelings shared by the majority of the French “classe moyenne”, and possibly some members of the British middle class.
Both economies are struggling to come out of the recession and share the same sad statistics: in the UK, 2.5 million people are without a job according to the Office for National Statistics (ONS)[1] and in France, the figure is 2.6 million according to the National Institute of Statistics and Economics Studies[2].
Chris Brown, a former IT consultant for Computacenter, was made redundant back in December 2008. The sudden drop in his family income gives him second thoughts on how the economy is run. Despite his wife, Tracey, working for Camden Council as a family manager, he says: “we have to be careful with the money, holidays to Disneyland and Italy are over for a while”. But they don’t blame the Labour government. “This is an international and global crisis. It could have been Gordon Brown [no family relation] or Tony Blair to blame. But remember that it’s Gordon Brown who saved the world banking system”.
For Chris, the bonuses awarded by the major banks JP Morgan, RBS alike to their top employees “should be given back to the community. We are in a pure liberal logic: whatever you did for someone in the past, they may not help you in return!”
A new economy emerges. People wait until the sales to buy or they go to the auctioneers. Alex Smith from Criterion Auctioneers in Islington, London, wouldn’t comment on her company profits but says that “everything is going up, except wages!”
The front-desk accountant explains that most of the small value objects go quickly under the auctioneer’s hammer while large and expensive ones tend to take longer to find a buyer. A regular bidder noted that “most of the buyers are from Russia. It seems they don’t know the recession!”. A perception shared by some in France.
Jean-François Guignard, working for an estate agent, spends a week a year fully paid in Britain “to improve his English” for his clients. He analyses that the real estate prices in Toulouse “are still going up despite people suffering unemployment and debts. Why?
It is very easy to answer: Russian oligarchs are investing massively in the top towns in France! My partner and I would like to buy a bigger place, but we simply can’t,
too pricey! Sincerely, the global recession hasn’t affected us.”
It is very easy to answer: Russian oligarchs are investing massively in the top towns in France! My partner and I would like to buy a bigger place, but we simply can’t,
too pricey! Sincerely, the global recession hasn’t affected us.”
Yves Thueux also still feels lucky. “My wife and I are both teachers and we have a relatively confortable life. We spend our holidays in Corsica and go skiing for a few days in winter”. But, this is a change from past years. The Thueux family used to spend
two months abroad for the summer holidays and rent a small cottage in the Pyrénées for a week for skiing.
two months abroad for the summer holidays and rent a small cottage in the Pyrénées for a week for skiing.
For retired people, a common topic of conversation is prices. With inflation now on a 3.7% annual basis trend as per the latest Bank of England figures[3], prices are eating some disposable income from lower earners. Margaret “Maggy” Hills is 74 and a former postwoman. “I have the fuel allowance but with such months as November and December, I spend most of my money on gas and electricity bills.”
The well-spoken, rosy-checked pensioner does not think of herself. She wishes that the government will “give jobs to the young ones, otherwise they will create trouble like the students”. To the question if bankers should give their bonus to the community, she replies that “in my time, it would have been scandalous to hear that bankers were lottery millionaires on a weekly basis; everyone was sharing. But we still do it: look at the millions normal people send to Children in need”.
A former mechanic, Adamo Celantano, from North London, has switched from shopping at Waitrose to Morrisons. “It makes a difference of £80-100 at the end of the month! Waitrose are now selling basic discounted products but they are still expensive for vegetables, meat and fish.” The sturdy mustachio panama holder with immaculate finger nails found a solution to balance the two choices. “When I have guests around, I go to Waitrose for the desserts and cook the other ingredients from Morrisons. They don’t see the difference because I throw away the plastic bags and packaging! Every pound counts at the end.”
Francine Henry works in a library in Paris and has a 38-year old daughter living in London. “We have more and more readers! I think people read more to escape the reality and buy fewer books. When I hear my daughter saying that the British government is closing libraries by the hundreds, I get very angry! People wherever in the world should have free access to books.”
The soft spoken trilingual professional regards the bankers’ bonus as “incoherent” in a modern society which is based on social values. “My parents fought for their social rights like la Sécurité Sociale [French equivalent of the NHS] and our pensions on a mutual contract between employers, employees and the State. Nowadays, this is over: the rich are getting richer and the poor poorer. I think the recession is affecting the US and the UK more than any other country. But because France has a decent social framework in contrast to the UK and the US, our quality of life is not affected too much.”
We talked to two bankers to gauge their opinion on bonuses and disparity in the community with the economic downturn.
Pascal Point is head of senior accounts (in other words, people of an income above £100,000 a year) for Crédit Agricole for the south-west of France. His office has impregnable views on the green hills of the Toulouse region.
“We have fewer new clients coming to us. This is simply because we have fewer people earning more. Saying that the rich are getting richer is a pure fallacy! Just look at the wealth of the top 100 people in the world and you will see that their fortune have lowered over the last two years due to their company shares going south.” The 43-year old rugby fanatic and player explains that the economic impact of the recession reaches all the layers of society. “I was talking to a client last week and she told me that over the last two Christmases her family stayed at home instead of flying to the French Antilles. Holidays have been “self cut” not only for the wealthy but from the bottom to the top”.
Pascal Point, a self-confessed poker player, sees the end of the tunnel in economic terms by 2012 and quotes Helmut Kohl, the former German Chancellor: “Today’s profits are the investments of tomorrow and the jobs of the day after”. We have to follow that maxim.”
Albert Breton[4] of Carrousel Capital Ltd of Piccadilly, London, is a senior executive with the hedge fund company which specialises in discretionary long-term hedged positions in closed-end funds[5] across the globe.
The London-Paris weekly commuter won’t talk about his company’s dealings and investments but sees the bonus as a measure of keeping the crème de la crème in the financial industry. “Because instruments are increasingly complex, their management require specialists who can understand finance, arbitrage pricing, manipulate the data and have a sound understanding of the markets. Bonuses are the carrot of the bankers, without them the finance industry won’t progress.” In other industries, some disagree with such a view.
Northamptonshire, Towcester, a former Roman town. John Carrington is optometrist. “My clients need to come to see me as sight is a vital function. There could be a recession or not, people need health firstly. So I haven’t seen a fall in visits. However, on the shop side, we sell fewer designer frames. But because the manufacturers are reducing their prices, most people still buy the likes of Armani, DNKY and so on”. The Jamaican-Austrian British eye specialist thinks that: “the trouble with economy in general is that the unexpected is very often the norm. Paying billions of pounds to people who cannot put the market forces right is a paradox of our modern society. It has to be the politicians which lead the economics because the ultimate differentiator is people!”
A point that some have forgotten in their opulent and elite positions.
[1]ONS - http://www.statistics.gov.uk/cci/nugget.asp?id=12 (accessed on 19/11/11)
[2] INSEE - http://www.insee.fr/en/themes/info-rapide.asp?id=14 (accessed on 19/01/11)
[3] http://www.bankofengland.co.uk/index.htm
No comments:
Post a Comment