Thursday, September 25, 2003

Keep Smoking! Please!

The French government is unintentionally taxing its citizens into better health.

Here’s the good news: The French are smoking less. And here’s the bad news: The French are smoking less.

With concern mounting over the public deficit and the state of Social Security, the French government raised tobacco prices in early 2003. Although the move was cheered by tobacco-phobic tourists, it was met by outrage from France’s cigarette-happy public. And the result? The French stopped smoking.

Or, more precisely, one percent of the population has stopped smoking since August of last year, according to a study published this week.

“This is the first time a price hike on tobacco has had an impact on consumption, where the fall in consumption has practically canceled out the higher prices,” one official told Le Monde.

All of which might be cheered by health professionals, but comes at a bad time for the government, which had counted on the price hike to net one billion Euros to support the 35-hour work week. Instead, the remaining smokers are now expected to bring in just 200 million Euros for 2003.

To make matters worse (or better, depending on your point of view), another price hike on tobacco is scheduled to take effect on October 20. French Health Minister Jean-François Mattei expects to net 800 million Euros from the October raise, which will see tobacco prices rise by 18%to 20%.

The returns from the tobacco price hike are destined exclusively for Social Security’s illness coverage, which this week announced its highest deficit ever of 10.6 billion Euros. Mattei has promised to not pass this level in 2004—or, at least not by too much. Previously estimated to reach 14.1 billion Euros in 2004, Mattei’s latest measures are expected to knock off 3.1 billion from that total, lowering the deficit to 10.9 billion Euros.

In addition to the tobacco price hike, Social Security will also get a boost from increased contributions from sick patients. Hospital visits will rise to 13 Euros from 10.67 Euros—a move that Paris’ Socialist Party deputy denounced as “bringing health insurance to its knees in order to impose its undoing.”

Other opposition party candidates are worried that the increased price of cigarettes and medical services in the 2004 budget is only setting a precedent. Then again, the French government may be forced to abandon both plans, if French smokers continue to respond to tobacco price hikes as they have this past year. As the number of smokers in France diminishes, the amount culled each year from cigarette taxes will be about as profitable as the higher hospital prices paid out by lung cancer patients.

Touch Gloves, and Come Out Fighting

Finally, unless you’ve been stuck in Charles de Gaulle waiting for your plane to take off, you probably are well aware that the US and France are at odds once again. This time, however, Presidents George Bush and Jacques Chirac are holding hands as they butt heads at the 58th General Assembly of the United Nations.

At hand is the role of the UN in the reconstruction of Iraq, with Chirac and his supporters pushing for a quick return of power to Iraqis, and the Americans insisting they need more time install a proper democracy.

But this time around, both countries’ leaders are taking pains to emphasize the great friendship between the two nations. Although such lovey-dovey declarations could be found throughout Le Monde this past week, no official memo appears to have been sent down to the French public, who have filled newspaper message boards with criticism of the American effort in Iraq.

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