Howard Davies: In France, Hollande's regime is struggling

The MT Diary: Howard Davies says we must give Greece our support and asks whether France's economy could go the same way.

by Howard Davies
Last Updated: 29 Jan 2013

Visiting Greece these days makes me feel like one of those people who drive out of their way to look at motorway pile-ups, or visit crime scenes to gaze at that blue and white tape the police drape round lampposts. Part of you thinks the unfortunate Greeks should be left to sort themselves out, away from the public gaze. But if everyone stops going there for the duration, that will make things even harder.

In Corfu, a tourism economy, it is tough to find direct evidence of meltdown, though the taxi driver from the airport worked extremely hard to make me book him for the return trip three days later. The real problem was torrential rain, which put a damper on my end-of-season sail and identified a nasty cabin leak that will create employment for a Corfiot handyman (probably the one who fitted the window wrongly in the first place). He is clearly a rigorous Keynesian, an advocate of digging holes and filling them in as a cure for recession.

Italy seemed calm and prosperous, too, when I dropped in. At the Accademia Gallery in Florence, we sat discussing the future of central banking under the gaze of Michelangelo's David, which somehow made the problems seem more tractable than they look on a rainy November afternoon in London. And Rome was its usual self: great statues, bad restaurants and mad drivers.

The Italians seem quite comfortable having dispensed with democracy. Once again, the trains run on time, and Mario Monti has improved relations with the Germans. But no-one has the slightest idea where they go from here. The coming man in the opinion polls and local elections is a comedian called Beppe Grillo. Some of his humour may get lost in translation, I fear, but his rage against the machine is apparent. He refers to a 'decade-long varnish of s**t' applied by the previous regime, and inveighs against the EU in language that would make UKIP proud. Italy pays EUR12bn to Brussels, which sends back EUR9m to regions controlled by the mafia is the general drift.

Grillo would be an interesting choice as PM, rather like electing Ben Elton, say. But if not Beppe, then who? In conversations with Italian finance folk, all roads lead back to Monti. Somehow he must be preserved for the nation, and given a democratic cloak of respectability. It's an unusual approach: choose a man first and build some kind of coalition around him. But it might be better than another dose of Berlusconi.

If it works for Italy, is it an option for others? In France, the Hollande regime is already struggling, faced with rising unemployment, factory closures and a ballooning deficit. Who would be the French Monti, if it came to that? We discussed it with French friends over a pied de cochon. They found an answer quite quickly - Pascal Lamy, who runs the World Trade Organisation. Mme Lagarde, seen as a latter-day saint outside France, did not get a look-in, though she might just make it into a Cabinet de tous les talents.

And here? Who would our super-Mario be? That archetypical cross-dressing politician Lord Patten is otherwise engaged. Alex Ferguson shows no sign of wanting a move. So I guess Alan Sugar is the inevitable choice.

On my travels I try to avoid spending time explaining what is going on in the UK. That is best left to Our Men, who are sent to lie abroad for their country. But it has been hard not to field questions about what on earth is happening at the BBC. Milord Patten is well known abroad as a British Europhile (well, perhaps now the British Europhile). So I found myself trying to explain just what his job is.

Conveying a sense of the BBC Trust in French is a challenge. Normally, the nearest you can get to for 'trust' is 'fondation'. But that doesn't quite convey it. There is no foundation as far as I know. It's a regulator, I try to explain. So why is it called a Trust? There's no good answer to that in any language. And is Milord P the chairman of the BBC or not? Well, 'he is and he isn't', I stumble.

Fortunately, at this point, my interlocutors lose interest. You can see the celebrated Asterix phrase 'ils sont fous ces anglais' passing through their logical Gallic brains.

If the last government had tried to explain their plans in another language that might have revealed their incoherence. The latest shenanigans have shown that it is impossible to have one individual who is supposed to be a regulator one day and a cheerleader for the corporation the next. The Burns review, on which I wasted nine months of my life, recommended that the BBC should have a proper corporate board, with a chairman and a chief executive on the usual model, and a regulator on top: a Public Service Broadcasting Commission, we called it.

The Blair regime turned all that down. Instead, it has a trust that isn't one, and a management board chaired by the director-general, with one or two non-executives sprinkled around for effect. You could tell how seriously they took it by checking the website a few days after George Entwistle resigned. He was still there, and the lead non-executive Marcus Agius was still proudly listed as the chairman of Barclays, a role he had relinquished some months before.

Corporate governance is all about hygiene and is much less exciting than betting on the next DG. But when things go wrong, the flaws in the structure become painfully apparent. The Government would do well to deal with them, rather than just hoping that a new bloke, or blokess, paid a bit less, will sort it all out for the nation.

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