GOVERNMENT WATCH : Fiscal Diet for France

The time has come for France to cut back its universal and comprehensive social welfare program. The policy reform that the government now proposes is reasonable and needed, even though it may be unpalatable to many workers.

Participation in the social security system is compulsory for both employees and the self-employed. The system, financed through contributions by employers and workers, provides health care, unemployment and disability benefits, pensions, family allowances and other benefits.

Reform would mean less; there would be fewer visits to the doctor, and retirement pensions for public-sector workers would be reduced to match those of the private sector. The government’s plan calls for canceling unprofitable railway routes and downsizing the bureaucracy.

To pay for its generous system France has had to borrow. As a result, the annual governmental deficit has reached $65 billion. Officials say that figure must be halved. This is going to hurt, but any labor strikes and street protests that arise will not solve the problem.

France’s President Jacques Chirac and his prime minister, Alain Juppe, are between a rock and a hard place--and some may think they deserve to be there. As candidates they promised jobs and now they are cutting them. But the reality is that continued fiscal chaos in the government would damage the economy even more than layoffs. Everyone will have to pay the consequences for years of imprudent policy.