27 February 2017

In Auvergne-Rhône-Alpes, what are the possible economic, social and political consequences of concentrating power in Lyon? By Maximilien PIASTRA

A white elephant? The never-used Conseil Régional d'Auvergne building

In France a region is the most recent territorial level of power. It also has the biggest significance on the French national scale and needless to say that it is a primordial one since January 1st 2016, 13 regions have replaced the 22 that had existed up to then. The new regions were born from the territorial reform initiated under French President François Hollande. The objective of such concentration was first to give them a “European size” so as to elaborate territorial strategies afterwards. This merger will, it is hoped, enable to generate savings in the long run. Lastly, the aim is also to give the 13 regions more autonomy (from the French State) so that they can integrate the social European sphere better.

Until January 1st, these regions have had to find a new name for themselves. Concerning our region, it was not that difficult: AURA, Auvergne-Rhône-Alpes, was born. It is undeniable that the big Rhône-Alpes was more powerful and perhaps more efficient than our dear old Auvergne. Some people think that the merger will undoubtedly boost the Auvergne. Others, more skeptical, reckon that this reform will only worsen the inequalities and will only have positive consequences for the former Rhône-Alpes region.

Whether the merger is a boon or a bane remains to be seen. Even though it is a bit early to calculate the consequences, my work will first focus on the economic consequences of this territorial subdivision. Then I will analyze what the repercussions of concentrating powers in Lyon (which has become the regional capital) will be on the Auvergne. To finish, we will study the political consequences it might also have.

As regards the economic aspect, one may already start forming an opinion about such merger. Indeed, as far as I am concerned it is significant to specify what the differences are between the wealth of both ex-regions. The population of AURA is 7,634,000. Its area is 69,711 km². There are 300,000 students (13% of the national total). GDP (gross domestic product) is €230 billion/annum, which is 12% of the GNP (gross national product).

As regards the choice of the capital for AURA, Lyon was the obvious choice. Indeed, economically speaking, Lyon is a major center for banking, as well as for the chemical, pharmaceutical and biotech industries. The city contains a significant software industry with a particular focus on video games, and in recent years has fostered a growing start-up sector. The headquarters of Interpol, Euro news, and the International Agency for Research on Cancer are in Lyon. Lyon was ranked 19th globally and second in France for innovation in 2014. It ranked second in France and 39th globally in Mercer's 2015 livability rankings.

The Auvergne can boast some major companies too. The Michelin Company, for one, is trying to make the most of the new territorial arrangement. The French tyre manufacturer is based in Clermont-Ferrand (in the Auvergne). It is one of the three largest tyre manufacturers in the world along with Goodyear and Bridgestone. Michelin also owns the BFGoodrich, Kleber, Tigar, Riken, Kormoran and Uniroyal (in North America) tyre brands. Michelin is known too for its Green travel guides, its roadmaps, the Red guide with the Michelin stars awarded to restaurants, and for its Bibendum company mascot/logo, colloquially known as the “Michelin Man”.  It is a publicly traded company with market shares amounting to $23,555 billion (the world tyre market is worth $180 billion). The Michelin Company has 111,700 workers and 6,000 researchers. It is in a position to multiply regional partnerships, for example the IFPEN (Institut Français du Pétrole et Energies Nouvelles) project (based in Solaize): the transformation of waste into SBR (styrene butadiene rubber), a substitute for oil.
The multinational company, which is obviously already well integrated in the globalized economy, will gain market shares thanks to the new region. I think Michelin will be able to boost not just the Auvergne but the whole of AURA.

It seems to me that the new region will undoubtedly favour the development of small and medium-sized companies from the Auvergne too. They will find it easier to integrate the European distribution circuit even the worldwide one.

Another example of a major company is Limagrain based near Clermont-Ferrand. It is an international agricultural co-operative group, specialized in field seeds, vegetable seeds and cereal products. Founded and managed by French farmers, Limagrain is the 4th largest seed company in the world (Vilmorin & Cie), the European leader for flours (Limagrain Céréales Ingrédients), the 2nd largest French baker, and the 3rd largest French pastry maker (Jacquet-Brossard).
The Group makes annual sales of €2.5 billion, with outlets in 55 countries, and has a 10,000-strong workforce (including more than 2,000 researchers). In Auvergne, the co-operative has 2,000 farm members. It conducts its business within the framework of a global, sustainable vision of agriculture and agribusiness based on innovation and regulation of agricultural markets.

Development remains one of the most important aims of regional partnerships. An example of efficient collaboration is the marriage between two French building federations (one from the Auvergne, the other from Rhône-Alpes): the FBB (Fédération Française du Bâtiment AURA) was launched in January 2017. Its headquarters are located in Villeurbanne (in the suburbs of Lyon). The FFB AURA includes 67,780 building companies (135,780 employees, 13% of the French building industry).

Another aim is to be better able to compete with other big European regions such as the German Länder. According to Jean Jack Queyranne, former (Socialist) President of Rhône-Alpes, the new region ranks 7th economically speaking on the European level. To link a region that was already very dynamic to another which was less dynamic can only boost the Auvergne. However, when one compares the budgets of some of the European regions, one notices the relative weakness of the French regions; for example, AURA has a €2 billion budget, whereas Bade Württemberg has one that is worth €42 billion!

Let us now study the possible social consequences of the merger. Lyon has become more powerful as it is now the regional capital of a bigger region. Clermont-Ferrand has lost its status of regional capital (of the Auvergne). Will Aurillac, Grenoble, Chambéry, Saint-Etienne and other important urban centers within Départements, lose out to Lyon?

The rural areas, notably those furthest away from Lyon, must develop new modes of life and economic activities, for instance in the sharing economy which aims at developing more convivial social relations and fairer ways to produce and consume goods and services via cooperatives, associations or foundations. The management of these rural territories must from now on be based on a principle of solidarity and social utility. As an example, one can refer to wise management of the upland areas in both the Auvergne and Rhône-Alpes; they have to organize tourist activities whilst protecting biodiversity and maintaining agricultural activity.

I wonder if the merger will help solve the social problems which affect all the municipalities including Lyon (which has the greatest homelessness, poverty and ghettoization problems). The CCAS (Centres Communaux d’Actions Sociales, i.e. local social welfare centers) cope with social problems at the communes level, and the Départements (there are 12 in AURA) manage the RSA (Revenu de Solidarité Active i.e. welfare payments); perhaps there should be a greater role for the new Région as regards dealing with social issues?

The merger entails costs, namely for moving (some) of the regional administrative services to Lyon, but, according to Jean-Jack Queyranne, the new Région will receive ten to twelve times less State aid than other big European regions.

Pôle Emploi (that manages the job centers) now have their regional headquarters in Lyon (the one for the Auvergne has been closed down). This is an example of how decision powers are being concentrated in Lyon.

However, I think that the merger and the consequent concentration of powers in Lyon will not have any direct impact on social issues (for the better).

After examining the different social aspects of the merger, I am now going to focus on the possible political (administrative) consequences. I think that it is in this domain where the concentration of powers in Lyon is the most important. The regional political power has really been transferred to Lyon. The headquarters of the Conseil Régional (the Regional Council) is at the Hôtel de Région in Lyon. 204 regional councilors were elected in December 2016, and the new Conseil Régional started work on January 5th 2017. Since that day, the majority is held by a right-wing party. The President is Laurent Wauquiez, aged 41. He was born in Lyon, is a former Minister and elected representative of the Haute-Loire Département to the Assemblée Nationale. His predecessor in Rhône-Alpes was Jean-Jack Queyranne and in Auvergne was René Souchon.

The setting up in Lyon of the new AURA Conseil Régional has had consequences on former regional councils. The regional executives and the main departments (town and country planning, economic development, waste management, regional transport, etc.) have been transferred to Lyon. In each ex-region, some auxiliary services have remained. A new building, intended to house the Auvergne Conseil Régional, built in Montferrand at a cost of €75 million, is now virtually empty. From now on, the main regional decision-making will be made in Lyon.

The AURA region has a website address (auvergnerhonealpes.eu) launched on December 30th 2016 which I have browsed. It informs citizens about their new community, the territory, etc.

I think that it is much too soon to draw a complete economic, social and political balance sheet of the concentration of powers in Lyon. Only time will tell if the AURA region and the concentration of powers in Lyon are going to be efficient (more efficient than the former regional set-up).

Working on this topic has made me aware of its importance; I will keep track of what goes on in my region, since, as a young person, it is my future which is at stake…

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4 comments:

  1. Stone4 April 2017 at 22:05

    Your article is very interesting, it is complete and accurate. Your researches seem to be very important. For me, you have nothing to add. Yet, you speak about things such as the Michelin Company which have for me no apparent link with your main subject which is about Lyon.

    ReplyDelete
  2. Tanguy6 April 2017 at 18:59

    Excellent work, a clearly explained subject that expresses ideas and invites the reader to take part in the subject that concerns him in his own right. The arguments are supported by examples and photos, which allows the reader not to get lost or to abandon reading. A complete work and even a little bit long but serious and realized successfully.

    ReplyDelete
  3. Anonymous6 April 2017 at 21:37

    Excellent work ! Resulting from important reasearches. I find it interesting to see the consequences between the merger of Auvergne and Rhone-Alpes.
    Good job

    ReplyDelete
  4. Tanguy7 April 2017 at 00:02

    Excellent work, a clearly explained subject that expresses ideas and invites the reader to take part in the subject that concerns him in his own right. The arguments are supported by examples and photos, which allows the reader not to get lost or to abandon reading. A complete work or even a little bit long but serious and realized successfully.

    ReplyDelete

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