After 2 days of communism, Moldova falls apart

Moldova, a small country between Ukraine and Romania, doesn’t get much serious international news coverage and for good reason – most of what they do is inherently hilarious. For instance, last December, the country got a small mention when police arrested a Christmas tree in Chisinau, the Moldovan capital. Other than that, they don’t get much attention, until now.

Moldova exploded this week after the communists won 50% of the parliamentary vote on April 5, which was enough for them to choose a new president and amend the Constitution. OSCE and the EU maintain the elections were mostly free and fair, but many within the country assert that the elections were rigged.

So, unhappy with this democratic decision to curtail democracy, 10,000 people mobilized using SMS, Facebook and Twitter and staged protests on Tuesday in the main square of Chisinau. However, not everyone was there for the same reason. Some called for support from the EU. Some called to join the country with Romania. Others just plain don’t like communism. Together, they put the MOB in mobilization. They ransacked and torched government buildings. 193 people were arrested, including eight minors. 96 police officers were wounded. People again assembled on Wednesday to continue ransacking and torching government buildings. Moldovan president Voronin was quick to blame Romania for inciting the violence. Romanian leaders, for their part, were quick to deny this.

It’s hard to say what ultimately led to this outbreak of violence. It seems to be a culmination of negligence, ignorance, lack of true democratic structure, rampant corruption, and economic hard times (to name a few). In fact, the country’s recent history reads like “What Not to Do” manual. Without solid democratic structures, civic education, transparency and responsible reporting, hard times become impossible to cope with and failure is inevitable, which is either hilarious or tragic to the international community.

Mo' Rubles Mo' Problems

Amidst the spring-time clouds and snow over the Moscow sky, there appears to be one bit of good news: the ruble, for now, seems to have stabilized, defying the critics of the Kremlin’s ruble stabilization program. When I was in Russia just two months ago, every stop at the ATM was like a special delivery from Ded Moroz, as the RUB/USD rate dropped from 29 to 32 in 8 short days. In the spirit of the season, I decided to do my part for the economy by “donating” my extra 10% of purchasing power to the fine brewhouses and eating establishments of St. Petersburg.

Yet, before we start celebrating, we should keep in mind that movements in the ruble have correlated almost entirely with movements in the price of oil, which is really the only marketable Russian export (in addition to vodka, defunct ideology, and depressing literature), and thus the indicator for the overall Russian economy. As crude has now stabilized above $40/bbl, so the ruble has stabilized below the euro-dollar basket of 41. This is a good thing, but it can also create an illusion of stability and economic upturn. Meanwhile, inflation continues to soar in Russia, outpacing other Eastern European countries. While inflation has picked up, salaries, both nominal and real, have been falling, and consumption has dropped sharply – it has even hit one of the most rock-solid sectors of retail! Sadly, many of my friends have recently had to choose between leaving their jobs or taking pay cuts of up to 50% - one friend tells me that her employer has not even paid her in the past 2 months, and she has taken out a line of credit to fund her basic living costs.

This last part is particularly worrying, especially since ruble stabilization has necessitated a significant rise in the already sky-high interest rates for personal and business loans at Russian banks. Faced with double-digit interest rates, Russians have done what many in the former Communist bloc have done over the past few years – take out loans in foreign currency, particularly in Euros, at much lower rates. This was great when emerging markets were booming, but now that currency devaluation has hit, consumers and businesses are struggling to make payments, with the latter raising prices on goods. Already in Russian cities, most real estate rental prices are set in Euros. As small businesses get hit with higher real costs for rent and loan payments, prices continue to rise. Moreover, as confidence in the ruble continues to wane, the desire for holdings (and lending) in foreign currencies grows still.

What is the Kremlin to do? Lowering interest rates on loans below the current 13% inflation rate would effectively mean government subsidization of lending, and would drive further devaluation of the ruble, and price inflation for imported goods. While this could cause a further flight of capital from Russia and could plant the seeds for ‘90s era economic chaos, it could also stimulate lending and growth, if coupled with prudent policy reforms, particularly toward small businesses which are drowning in bureaucracy and corruption. It might also cost the Kremlin less, and be more effective, than continuing to subsidize banks who then speculate against the ruble in the Forex markets. Keeping interest rates high, however, may create the illusion of stability, but will surely continue to stifle growth, and will hurt ordinary Russians most. In any case, winter in Russia may not end for some time to come.

(photo from Alcoyotl's photostream)

Russia and China: a Power House or Broken Home?

Russia and China seem pretty chummy of late. Both countries essentially head the Shanghai Cooperation Organization – an organization which frightens the West because it promotes cultural, security, and economic cooperation among China, Russia, and Central Asia. In the cultural arena, China has dubbed 2009 the year of the Russian language, and Russia will make 2010 the year of the Chinese language. To promote security, the two countries established a hotline between their heads of state.

Most recently, the countries displayed extraordinary economic cooperation. Russia secured $25bn in loans from China in return for supplying oil for the next 20 years. This deal is the largest trade financing agreement between the two countries to date: Russia desperately needs money and China desperately needs oil. Everyone’s happy, right?

Not exactly. Days after the historic agreement, a Russian warship opened fire on a Chinese cargo ship and sunk it. The two countries' foreign ministries blame each other. But Clifford Levy of the New York Times actually blames deteriorating bilateral relations. Why?

While both countries enjoy honoring agreements that are mutually beneficial (economic cooperation) or mutually benign (language exchange), Russia and China have a tendency to disregard cooperation when it affects domestic politics. Levy likens the sinking of the Chinese cargo ship to last year’s Russian-Georgian conflict. China didn’t support Russia because Russia recognized the autonomy of South Ossetia, and China didn’t want to encourage Tibet’s or Xinjiang’s calls for autonomy.

What's clear is that Russian-Chinese relations are only as simple as each country’s domestic politics, which is to say they're not all that simple. Notably, Russia and China don’t have an alliance or even an established method to resolve disputes and disagreements. They just have a mechanism for cooperation, which can be honored or ignored at either country’s whim. Hopefully, ignoring the cooperation won't lead to any more drowned sailors.

Poland solves economic crisis by going back in time

Poland deserves some recognition: they brought us Lech Kaczyński (left) and Jarosław Kaczyński (right). In 2006, Lech, the president of Poland, appointed his twin brother Jaroslaw as Prime Minister. While dutifully manging the fragile coalition government and promoting a conservative Christian agenda, the duo became overnight YouTube sensations (as well as the butt end of a new wave of politically charged one-liners). In 2007, the Law and Justice party that was co-founded by the twins lost its majority in Parliament and Jaroslaw, became leader of the opposition. Lech will continue to serve his five-year term as President until 2010.

On February 10th, Poland set another precedent (unless you consider Medvedev Putin's twin) by announcing a solution to the country's currency problems. The economics minister, Waldemar Pawlak, announced that the Polish government will pass a law allowing companies to renegotiate currency option contracts established last year. Back then economists believed Poland's currency, the zloty, would continue to strengthen into 2009 and threaten Poland's export industry. These companies had the option of purchasing currency in advance at prices below the predicted value. Had the currency continued to appreciate, these companies would have been able to continue to sell products overseas at more competitive prices than the predicted exchange rate would allow. This was before the economic downturn. Now these companies are holding currency options priced well above the going rate. According to the Economist, the zloty has lost nearly 37% of it's value against the Euro since 2008 and led to cumulative losses estimated at $5 billion. Many of these companies face bankruptcy and or failure.

To solve this crisis, the Polish government is going to allow businesses to retroactively renegotiate or simply back out of their currency options. In this scenario, the burden of the currency decline will weigh more heavily upon banks and save many companies from catastrophe. Aside from the legal mess that this will create, the move is flat out sketchy business; not unlike appointing your own brother to a top political office. Laugh all you want, but these backwater politics just may stave off the collapse of the country's export industry.

Lech Kaczyński Photo via the President of the Republic of Poland
Jaroslaw Kaczyński Photo via the Chancellory of the Prime Minister

Devaluing the rouble

Last month, the Bank of Russia announced a floor under the rouble. So much for that. The floor was already tested this week and the central bank is burning through reserves faster than Putin does ABBA cover bands. On the surface, we would expect Russia to have little difficulty in defending the rouble, given the substantial accumulation of foreign exchange reserves in recent years (high commodity prices + booming exports + the long shadow of the 1998 rouble crisis = big time reserves). But look a little deeper, and that cushion isn't quite a comfortable as it appears.

In fact, Russia is in big, big trouble.

The Russian government didn't anticipate the sudden, rapid decline in commodity prices (to be fair, few did), and it is now struggling to balance its obligations amidst declining revenues and FX earnings. Its 2009 budget relies on $95/barrel oil, and billions of dollars have been committed in support of the banking sector (not to mention the money provided major companies crippled with debt). Defending the rouble and supporting the banking sector/companies alone consumed approximately 40% of Russia's FX reserves since summer 2008, and were a major factor in the Fitch downgrade on Wednesday. If the government's recent actions are any indication, Russia's foreign exchange reserves will come under increasing pressure in 2009. It delayed discussions on amending the budget, and publicly stated that it won't make any cuts to this year’s spending. With social instability spreading, it is unlikely the government will make any significant cut to the budget over 2009-2010. Furthermore, its new crisis strategy directly targets the banking sector, which should be applauded, but will require a significant amount of capital.

Which brings us back to the rouble. The central bank's ability to defend the rouble will be seriously constrained by the budget and banking sector support. Its decision to gradually devalue the rouble, as opposed to allowing it to freely fall to its market equilibrium, has proven ill advised and sacrificed a greater share of foreign exchange reserves than was otherwise necessary. Little official debt, falling imports, and the complacency of the Russian elite would have made a single devaluation possible. But now the central bank is in a bind; let the rouble fall and you risk a loss of confidence in the central bank, keep defending it in the hope that the oil price recovers and you play a dangerous game of Russian roulette (no pun intended).

Russia's spending and banking sector support are necessary under the current economic and financial conditions. The market already expects a further devaluation of the rouble; artificially supporting it is a losing battle that only increases the risk of a serious run on the currency and drains its foreign exchange reserves. Russia should set the rouble free.

(photo from melted snowball's photostream)

Facebook sparks controversy in the Balkans

In the last few weeks, two interesting stories made the press involving the social networking website Facebook and the Balkans. On December 1, the International Herald Tribune reported that police detained 22 year old Niksa Klecak – creator of the Facebook group "I bet I can find 5,000 people who dislike [Croatian Prime Minister Ivo] Sanader." Police questioned Klecak for three hours and searched his home and computer. Several defended the detention, claiming that the group included a photo montage of Sanader in a Nazi uniform - Nazi symbols are banned under Croatian law.

Others, including political analyst Jelena Lovric and Social Democrats leader Zoran Milanovic, claim it is a veiled attempt to quash growing dissent that pervades the internet. An earlier Facebook group in protest of Sanader already had 80,000 members. Klecak’s group has attracted more than 5,000, and in the wake of his detention, almost 3,000 joined a new group called "Search my flat, you Gestapo gang, Croatia is not a police state." Sanader might be disappointed to hear that "I bet I can find 7,000 people who LIKE Sanader" only brought together 19 Facebookers. Ouch.

Meanwhile in Serbia, Radio Free Europe/Radio Liberty reports that a Facebook group proclaiming that the massacre at the Bosnian town of Srebrenica is a model for "fighting Islam" has popped up and drawn some 1,000 members. An estimated 7,000 Muslim men and boys were killed at Srebrenica in an act of genocide. A group in Bosnia-Herzegovina is asking Serbian officials to shut down the page and to prevent the Internet from being used as a forum to promote hate speech. No action thus far has been taken. 

These cases bring to mind the usual questions. What is freedom of speech? Should there be limitations to freedom of speech? etc., etc. However, what must not be overlooked is that while both cases are controversial in nature, they are both being openly discussed in and out of country. While it is disheartening to see a man be detained for starting an opposition Facebook group, and it’s just plain disgusting to see so many people support what most consider genocide, we should be reassured that the citizens of these countries as well as international observers are informed. In stark contrast, over the weekend 90 people were detained in Russia for participating in an opposition rally organized by Garry Kasparov. You may have read about it; the Russian press (for some reason) has overlooked this story.

(photo by ManilaRyce)

The Great Resource Guessing Game

Petroleum Intelligence Weekly has published its influential annual ranking of the world's top oil companies. The most notable and widely reported aspect of the report is the global power shift from the traditional private oil majors to national oil companies. 27 of the top 50 oil companies are now majority state-owned. China's CNPC leads the surge, having surpassed both BP and Shell according to the report's metrics. Exxon Mobile is the only majority privately owned company remaining in the top 5.

The impact of a global oil market dominated by state-owned firms on both international growth and security is immense. The recent Global Trends 2025 report published by the US National Intelligence Council, and Patrick's farming piece below, highlight the high probability of future inter-state conflicts over increasingly scarce resources like oil. Energy security has risen to the top of both national and international agendas, and the threat of countries using the "energy weapon" for geopolitical leverage has lead many Western states to move in the direction of resource nationalism.

Beyond military and economic conflict, market uncertainty is the biggest effect of greater state control of natural resources. Reserve and refining capacity statistics are classified as state secrets in many countries with nationalized energy sectors. As Western majors are kicked out, and given the press restrictions in countries such as Russia and Iran, it will be increasingly difficult to obtain an accurate measurement of global supply and capacity (you can find my take on Russia's energy industry here). The hysteria surrounding "peak oil" (due in part to the realization of "known unknowns") last year probably contributed to the record run up in oil prices. The inability of traders to estimate and match long term supply and demand will drive up the speculative risk premium in oil prices, particularly if over-the-counter markets remain unregulated (an issue that has dropped off the political radar since the commodity bubble burst). This will only exacerbate inflationary pressures, political instability, and resource competition similar to what we witnessed over the past few years.

Information, transparency, property rights, and security are all central elements of an efficiently functioning oil market. Greater resource nationalization compromises all of these, and increases the probability of resource-driven political and economic conflict. As long as the trends outlined by Petroleum Intelligence Weekly continue, energy security will remain one of the defining issues of the 21st century.

(Photo: ifijay)

Russian military capacity

During the Russian-Georgian War this summer, I noted that military analysts the world over would be watching carefully at how Russia fared in its first conventional conflict since Afghanistan. In an article in last week’s Economist, the verdict is in: Russia didn’t do too hot. I strongly encourage you to read the entire thing, but here are the best bits:

· Russian military communications equipment was so dysfunctional in Georgia that the army resorted to using mobile phones to coordinate positions. I can’t help but wonder if they had to pay roaming charges.

· Despite all of the bellicose rhetoric about naval buildup and the imminent construction of 5 or 6 new aircraft carriers, Russia doesn’t even have a naval port with the capacity to build them.

· Although Russian defense spending has doubled in the past 4 or 5 years, massive and systemic corruption ensures that about a third of the funds are wasted.

· In a notable reversal of Cold War geopolitical calculus, Russia now relies on its nuclear deterrent to offset the West’s overwhelming advantages in conventional military combat. It used to be the exact opposite.

While it’s important to acknowledge Russia’s newly aggressive behavior, one should not conflate the willingness to use force with the capacity to use force. Russia remains a threat to its immediate neighbors, but, joint military exercises aside, the country has an incredibly limited capacity to project hard power further than that. In short: Russia is powerful, but that power is constrained by realities (an economy based on resource extraction, corruption, weak institutions) that will make it difficult to sustain.

(Photo from Oleg Zdorik’s photostream)

You just took one in the jugular!

Given my co-author's discussion of Russia's resurgence, I found this interesting. 

Just as Putin was arriving with a group of wildlife specialists to see a trapped Amur tiger, it escaped and ran towards a nearby camera crew, the country's main television station said. Putin quickly shot the beast and sedated it with a tranquilizer gun.

I'm not sure if Putin is sending a message, but Vlad does look pretty tough in camo.

(Photo: Reuters)

Russia-EU relations: a bang or a whimper?

The Russia-Georgia war continues to have repercussions: EU leaders gathered in Brussels today for an emergency summit on the state of relations with Russia. Last month, I attempted to apply a rudimentary public choice model to the major players in the conflict. At the time, for simplicity’s sake, I treated the EU as a single entity with a unified policy position. In reality this could not be further from the truth. There are hawks, such as the previous Warsaw Pact members and the UK, and there are doves, such as Germany and Italy. In determining a member nation’s stance, it is useful to look at two metrics in particular: history and energy. Specifically, has the country been pushed around by Russia in the past (pretty much all of Eastern Europe)? And how much Russian energy does the country import? Personal relationships also play a role: Vladimir Putin and Italian Prime Minister Silvio Berlusconi are close friends, for example.

Where do the Russians stand? I’m troubled by the implications of their explicit declaration of ‘spheres of interest’. However, I still think it’s possible to at least partly understand Russia’s motives through the looking-glass of its leaders’ personal incentives. This is a view that I first heard espoused by Garry Kasparov in 2007 and again last week by Richard Baldwin. It’s certainly true that Russia’s political elites are making an enormous amount of money off of the country’s economic expansion, and they’re aware that war would disrupt this trend. As a friend of mine once put it, capitalism in Russia is like the Wild West: poorly regulated, corrupt, winner-take-all, and unprotected from government intervention. In such circumstances, powerful political actors are well-positioned to get rich. While stoking the fires of nationalism will help solidify their leadership, outright war is undesirable because Russia might lose and the economy might tank. Thus, I suspect that Russia’s leaders won’t push things too far (I’m being purposefully vague), as doing so would be against their own interests. In any case, Russian stock markets have already been majorly spooked by the war and other recent events.

And where does this leave us? For the time being, I suspect that ‘pragmatism’ on all sides wins the day. The EU stopped short of applying sanctions: the last thing that leaders in flagging economies want is to be on the wrong side of high-stakes energy diplomacy. Still, the rarity of such emergency EU summits signals that they’re taking this seriously. Russia, in turn, is quite reliant on the EU for its export market (which feeds into the reasons mentioned above). Is this the right policy for the EU to be pursuing? It’s doubtful: I think the EU ought to be taking a tougher line, and it still might if it can get its own ducks in a row on the appropriate policy response. This is something to keep watching.

(photo by dbarronoss)

The death of the death of... nationalism?

What good timing! One day after Zeitgeist considers how transport costs might bring an end to our current era of globalization just like the last one, Paul Krugman writes a column about how this era of globalization might be destroyed by a resurgence of nationalism... just like the last one. (Do you think he gets his column ideas from us?)

Anyways, it's a very interesting column and it gives us a chance to continue our "death of the death of" theme here at Zeitgeist. (Ok, last one, I promise.) But I'm not quite sure what Mr. Krugman wants us to take away from it. It's quite pessimistic and seems to lead the reader toward the conclusion that we should somehow 'hedge our bets' on globalization, without quite coming out and saying it.

Yet I know Mr. Krugman is aware that if every country took this logic to its natural conclusion by striving for national self-sufficiency, the 'fragility of globalization' would be a self-fulfilling prophecy. Perhaps he simply meant to highlight the fact that global integration is not the natural state of international relations and is susceptible to nationalism. This is an excellent point that we should take to heart, but precisely because economic globalization is so fragile suggests that we should be doing everything we can to defend it. The alternative is simply worse.

In any case, the situation might not be quite as dire as Mr. Krugman implies. He writes:

And if Russia is willing and able to use force to assert control over its
self-declared sphere of influence, won’t others do the same? Just think about
the global economic disruption that would follow if China — which is about to
surpass the United States as the world’s largest manufacturing nation — were to
forcibly assert its claim to Taiwan.

But as Dan Drezner, aptly points out, China is not Russia, and Taiwan is not Georgia. I'm also not convinced that his point about the food crisis is entirely valid, either:

For years we were told that self-sufficiency was an outmoded concept, and that
it was safe to rely on world markets for food supplies. But when the prices of
wheat, rice and corn soared, Keynes’s “projects and politics” of “restrictions
and exclusion” made a comeback: many governments rushed to protect domestic
consumers by banning or limiting exports, leaving food-importing countries in
dire straits.

This is true, but it's a bit misleading. At least some of the shortage can be attributed to heavily-regulated and closed markets sending inadequate signals to farmers (I'm thinking India and Pakistan especially.) And self-sufficiency is an outmoded concept: a lot of countries don't have enough arable land to produce enough food to survive; others have more than enough. The food crisis was a perfect storm of increasing long-term demand for agricultural commodities combined with poor harvests and exacerbated by government export controls. With the world population expected to hit 9 billion by 2050, now would be a bad time to look for alternatives to international agricultural trade. If anything, we should be looking to improve trade flows by reducing barriers and subsidies (which should allow for the most accurate pricing and price signals in the long term.)

I'll be the first to admit that things are not great in the world at the moment, but let's not throw in the globalization towel just yet.

On Georgia and Russia

Reports are coming in that a peace plan has been agreed by Georgia and Russia. The details remain largely unclear, but French (and current EU) president Sarkozy, who helped broker the deal, assures that Georgia's territorial sovereignty will be guaranteed by the "spirit of the text." Whatever that means, an end to hostilities is welcome news in and of itself: this has truly been a nasty little war, and our deepest sympathy goes out to everyone who has been affected.

There has been an enormous amount of quality analysis of this mini-war from every conceivable angle. I imagine the military types in particular are falling over themselves for a chance to analyze how Russia's army has performed in a large-scale conventional military operation. We here at Zeitgeist have had several conversations about how we could add to the debate. Rather than trying to analyze the outcomes or their implications, we want to try to provide a framework for understanding why the major players behaved as they did (or in some cases, didn't.)

In situations like these, international politics looks a bit like a high-stakes card game. Each player makes a bet and wins or loses depending on how the other players react. In this particular hand, we had:

President Mikhail Saakashivili; President Saakashivili knows that tensions with Russia over South Ossetia and Abkhazia have been brewing for a very long time. Also, he perceives his own personal credibility to rest in large part on whether he can keep his election promises to bring the breakaway regions under control. He understands the power disparity between Russia and Georgia, but calculates that any response would have to be limited, because the terrority nominally belongs to Georgia, and also because Georgia has been seriously courting Western allies for the past few years. They have a disproportionate number of troops in Iraq and have upgraded their military with American weapons technology. Mr. Saakashivili doesn't think that the West will stand idly by if Russia does overreact.

President Medvedev/Prime Minister Putin; Leaving aside any discussion of who's actually in charge, Russia is keen to maintain hegemony in its 'near abroad', the area which comprises the former Soviet Union. The color revolutions and reorientation of Ukraine and Georgia toward the West have infuriated Russia, and Russia perceives Georgia's desire to join NATO as a direct threat. Combine all of this with the fact that Russia believes that NATO helped facilitate Kosovo's secession from Serbia. Russia is therefore looking for any plausible reason to further destabilize Georgia by encouraging the breakaway regions, both to punish Georgia and send a message to the West.

EU President Sarkozy; The European Union is keen to not antagonize Russia, a key energy supplier for much of Western Europe. Most of Europe is also much less enthusiastic about Georgia joining NATO than the United States. There is almost no chance that any European country would forcefully intervene in the conflict. Any actions would likely be primarily face-saving (carefully condemn the use of violence and work for any sort of deal that stops hostilities as soon as possible.)

President Bush; Georgia was a key pillar of Mr. Bush's freedom agenda, and relations between the two countries have been especially strong during his tenure. Mr. Bush is clearly unhappy with Russia's actions, but his hands are tied. He is personally extremely unpopular, American troops are busy fighting two other wars, and the injection of American forces into the conflict would be tantamount to a serious escalation. The US pushes a tougher rhetorical line than the EU and agrees to help transport Georgian troops back from Iraq to take part in fighting, but is highly unlikely to intervene otherwise.

Given the motivations and limitations of the main players, it is perhaps a bit easier to understand why things happened the way they did. Unfortunately, this was not a card game. This was real life, and there were real consequences.

Leisure vs. consumption

French President Nicolas Sarkozy (pictured right with his supermodel wife) has been quite busy of late, whether it's modernizing France's military (insert requisite joke here), or, perhaps even more drastically, dismantling the mandatory 35-hour work week. This was actually a central campaign promise of M. Sarkozy's: travailler plus pour gagner plus (work more to earn more.) Under the new legislation, it will be easier for employers to set longer working hours, which should allow workers to make more money.

I don't imagine many étrangers, particularly North Americans, will have much sympathy for the fact that the French may have to work more. Americans in particular tend to put in long hours and if we do it, the reasoning goes, why shouldn't they? But then an equally valid question becomes: why do Americans work so much?

I think the answer to both questions speaks to general differences in cultural preferences/norms. Americans value higher consumption. The French, as well as most of Western Europe, value leisure highly. As a result, welfare-maximizing individuals in both countries pursue these goals: in the US we put in more hours at the office and earn more money, so we get to come home to our nice McMansions and flat-screen TVs, while in France you've got less fric ($$$) but you can duck out at 3 and go meet your buddies in a cafe to discuss how meaningless life is.

Jokes aside, I do think my main point holds: Western Europeans tend not to be as rich as Americans, but a large part of this is because they place a higher premium on leisure time. So if you want to laugh at how ridiculous the idea of a mandatory 35-hour French work week is, it's probably worth keeping in mind that the French find our 55+ hour weeks equally absurd. Which lifestyle do you think is better?

 

N.B. for simplicity I left out some important caveats about the French work week, like the fact that most French people work more than 35 hours and use it to build up vacation time or that French workers are the fifth-most productive per capita in the world.