After more than a decade of lectures from Gordon Brown about the need to let markets rip, it is little wonder that the French are having the last laugh. As she relaxed in her room in the Dorchester in London ahead of Saturday's G20 meeting in Scotland, the French economy minister, Christine Lagarde, was quietly satisfied that the French economy is in better shape than Britain's. And if you suggest to her that working with the pro-City, anti-regulation Conservatives will be more of a struggle than the Labour government, the former head of a US law firm cannot help but burst out laughing: "But you had Gordon Brown for all those years!"
Lagarde insists that the interventionist policies of President Nicolas Sarkozy's government, along with France's famously more generous social safety net, have been crucial factors. "The welfare system that we have, on which we spend a lot more public money than the UK, that's an economic model that is slightly different; that has been a bit of a shock absorber." Instead of relying on exhortations to banks to lend, Lagarde has taken a more "dirigiste" approach, appointing a "credit mediator" to intervene. So far, 10,000 firms have been helped and banks that fail to extend credit lines to viable businesses are "named and shamed".
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