Encore – Chapter 11 – Cracks in the Wall


Leo Melikian, a smart but naïve 25-year old stuck in a lowly white-collar job in the South of France, finds himself living each day twice. His Day As are spent travelling, his Day Bs on his career – but has he been so focused on the fun that he missed the first signs of France breaking apart?

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Chapter 11: Cracks in the Wall

 

It had been a week since Stockholm, a full 14 days in my Day A/B world, and Chiara still managed to intrude on my thoughts daily. Today however, I had other concerns: it was my dad’s 49th birthday and we were meeting for a Saturday lunch to celebrate. My mom had offered to go out to a fancy restaurant, but in typical fashion, my dad had considered it a waste of money and stated that he would much prefer something low-key at home.

I parked my Benz in front of their sandstone home, edging into the spot between my sister Lara’s blue Citroën DS and my dad’s dark grey Renault minivan. As I got out I scanned my surroundings, a habit I had unconsciously picked up ever since I had upgraded to a 100k euro car.

My parents lived right in the suburbs of Valbonne, barely three minutes away from the city center where I had gone for beers with Thierry two months ago. Their house was one in a long row of identical buildings that gave directly onto the main artery leading to Grasse. As it was the South’s administrative capital, the road saw a lot of traffic, and as a result, my Benz was very visible. I shrugged. Hopefully it would be ok, not that there was much that I could do about it anyways. I knocked on the door.

My mom opened the door and her face lit up when she saw me.

“Hi mom,” I said, giving her a bise. I stepped through the doorway and into the cluttered entrance, stacked high with piles of footwear, clothes and bulky mountaineering bags packed with my dad’s climbing equipment. I could see into the living room, where Lara and my dad were sitting on the couch watching TV.

“Hope I’m not too late?” I asked, “The traffic on the Prom’ is always bad on Saturday.”

“No, no, lunch will be ready in thirty minutes,” she said, and hurried back to the kitchen.

I walked into the living room, greeted my sister and plopped down on the worn-out yellow couch next to my dad.

“Happy birthday dad,” I said. He grunted a thank you and kept watching the TV. It was the 12 o’clock news, a continuous dribble on the most recent government endeavors to get their runaway budget under control. I had gotten so used to my apartment’s Ultra HD TV that it was almost painful to look at the old cathode tube one that they had had for the last 10 years. I should have gotten him a new TV instead, I thought.

Buying a gift for my dad was a task I consistently dreaded. He was impossible to please. In his mind, he already had everything that he would need, and any addition was unnecessary at best and a waste of money at worst. For years my sister and I had tried to find gifts that might prove unexpectedly useful: noise cancelling headphones for the plane, new climbing gear, even books and movies on famous mountains. But the headphones now sat unused in the attic, the climbing gear was judged inferior to the one he already had, and the books and movies ended up with my mom.

This year however, I was certain I had cracked the perfect gift. I was offering my dad a weeklong vacation in Kenya with my mom, all expenses paid. For only 7,400 euros, I was flying them both to Africa for a trip that was sure to make them equally happy. The first half was for my dad: trekking up Mt. Kilimanjaro, Africa’s tallest mountain. It was a hike up the 5,895 meter snow-capped volcano lost alone in the middle of the Kenyan Savannah, easy enough for my mom to enjoy and exotic enough for my dad to love. Not to mention that I had planned the second half of the trip with her in mind: a safari, riding around in jeeps all day looking at giraffes, lions and rhinos. It was perfect. I patted my jeans’ front pocket, feeling the envelope with the tickets and itinerary folded in place.

“So when can I see your new place?” asked Lara.

“Whenever you want,” I answered, “Just let me know when you want to pop by. Bring Henri too, we can have a drink. Did I tell you I have my own beer taps?”

Lara was two years younger than me. She had taken most of her looks from my dad. Shorter than me by a head, she had shoulder length jet-black hair that framed a round face on the cute side of chubby.

Growing up, we hadn’t gotten along that well. She had extremely thin skin when it came to taunts and teasing, and I took a sadistic joy in watching her explode at the smallest jibe. It drove our parents crazy. Not a day passed when she wouldn’t be screaming and shouting at me to leave her alone.

Our relationship had improved once we had moved out though. We still didn’t hang out together regularly, but we had grown closer. I had been the first to meet Henri, her boyfriend, and had been happy to see that his cool and levelheaded personality was the perfect match for her Southern fire.

I reached over and poked her in the stomach with a finger.

“Poke,” I said with a grin.

“Stop it!” she said, batting my hand away. Some jokes never got old.

“Seriously, I’ve had a rough week and the next one is going to be worse,” she complained.

My sister had become a nurse a year ago after two years at the IFSI Lille, in the city at the very northern tip of France. It had been a miserable time and she called home every day complaining of the cold, her calculating classmates and the stress of her exams. She high-tailed it back to the South as soon as she could, and had been working for the past year as a nurse in a retirement home. Given how many elderly people opted to retire in the South to enjoy the warm sun and perfect weather, she wasn’t likely to face employment challenges any time soon.

“What happened?” I asked.

“We’re completely understaffed,” she said, “Yesterday I had a ten hour shift, alone. Just me and 150 retirees. Can you imagine? I had to give out meds, help the bedridden ones wash and do my rounds to make sure everyone was ok.”

“No one else was there?” I asked.

“The doctor shows up when he wants to. I usually have two caregivers with me, but they both quit last week. And we’re only three nurses total. So yeah, alone.”

“It’s ridiculous,” I said, genuinely shocked, “Why isn’t the home hiring more nurses?”

“Because they have no money,” said Lara, “They keep telling me how everything is too expensive. You know I technically have a lunch break but I never have time to take it, and it’s never paid for? That’s a free hour of work every day.”

“That’s messed up,” I said.

“That’s not the worst part,” she continued. When you started Lara on this topic it was near impossible to get her to stop. “Imagine what would happen if one of the patients goes into cardiac arrest when it’s just me? Or two of them at the same time? Or three?”

I could hear the passion in her voice. She had been a mediocre student, but when she had entered nursing school, she had found her calling. Helping people was her life’s mission. Although she spoke with both anger and sadness, it wasn’t at how broken the system was but at her own inability to do more.

“Two days ago I had a patient who went into hyperglycemia. The cutest 85 year-old lady. I recognized all the signs and all I needed to do was give her a shot of insulin. But of course, first I needed the doctor’s approval. And he obviously wasn’t in. So I call, but he doesn’t pick up. Meanwhile the old lady is starting to shake and lose consciousness.”

“What did you do?” I asked.

“I gave her the shot. What else was I supposed to do? And I hope they never find out because if they do, I’ll lose my license.”

“Fuck…” And to think that I complained about my job sometimes, “You should quit. Change jobs. Find a home where the situation is better.”

“It’s the same everywhere!” she said, “Every single one of my classmates says so. There aren’t enough nurses in France and no one has the money for them anyways. Do you remember the flood four years ago?”

I nodded. Back in 2015, the South was rocked by a rainstorm so massive that all the coastal cities were hit by flash floods, devastation and havoc. It rarely rained in the South, but when it rained, it rained hard.

“Well, some retirement homes had retirees on the ground floor. When the floods hit, some of them couldn’t get out of their beds on their own. And because it’s like 1 nurse to every 70 patients these days, they couldn’t get to everyone on time. Over 100 people died. Drowned in their own beds,” she shuddered at the thought.

“You’re kidding.”

“Nope. It was in the news and everything.”

“It didn’t cause a scandal?” I asked.

“Come on Leo… no one cares. No one cares about old people anymore. The only news people want is celebrity gossip or the latest juicy rumors.”

My mom called out from the kitchen that the food was ready, cutting short to further conversation. My dad wordlessly turned off the TV and went to sit at the head of the table. It was unequivocally his seat, and I couldn’t ever remember him having sat anywhere else. My mom brought out the crudités, bowls of raw vegetables that were the first course in every traditional French meal. I stacked my plate with cucumber cubes, grated carrots and sliced up red cabbage, poured homemade vinaigrette over it, and dug in.

As I looked up from my food, I noticed my father hadn’t started. My mom was looking at him with a mix of expectation and sadness. It wasn’t unusual for my dad to be silent, but there was something strange about him this time. His shoulders were slouched, as if holding up a great weight. The ice in his cold demeanor had been replaced by something darker and emptier.

“Kids,” he said, and we both turned to him. He took off his glasses, pinched his nose as if in thought, and put them back on.

“I have bad news,” he continued, “It’s not very bad, but I just want to make sure you know.”

“What is it?” asked Lara.

“You might have heard about it from the news, but I got confirmation yesterday when I received my paycheck and there was no AGRCOC deduction. Half my pension is gone.”

We stood stunned, not understanding. Faced with our looks of confusion, he went on.

“AGRCOC declared bankruptcy a week ago, but no one knew what would happen. Apparently they’ve completely stopped paying pensions, and they’re no longer collecting pension payments from active employees. Unless the state steps in, it means it’s gone.”

I didn’t know what to say. I had never seen my dad, usually so strong and confident, look so embarrassed. It was painful to watch.

“Now the good news is half of my pension is with CNAV, and they’re still paying. We just need to start saving up and hopefully invest somewhere and we’ll be fine. We’ll probably sell the house when we finish repaying it in a few years and move into somewhere smaller. Maybe to Brittany, so we can be closer to your mom’s family. The rent is cheaper there too. And the good news, as a state employee, your mom’s pension is completely safe.”

“But,” I asked, “Can you still get some of your money back?”

“No,” he said, looking down at his plate, “It’s all gone.”

“They didn’t invest it? I mean, you’ve been paying for that pension for over twenty years! Where did the money go?”

“It doesn’t work like that,” answered my dad, “Anyways, your mom and I just wanted to let you know and make sure that you don’t worry. We’ll be okay. Now let’s enjoy the fine meal she prepared.”

My mom reached out and squeezed his hand. He blinked once at her in appreciation, and reached out for the carrots. He started to eat with a determination that made it clear that the discussion was over.

I was beginning to regret not having picked up my phone when my mom had called me yesterday on Day A. Because of the Day A / Day B split, and my choice of confining all social events to Day B, I would always get a ton of calls on Day A when I didn’t show up to planned meet-ups. When I had arranged my housewarming party, 30 people arrived at my place on Day A while I was busy having fun in Briançon, an alpine city 4 hours away.

So I simply ignored calls on Day A. For my house party, I had eventually grown so annoyed at the number of missed calls that I had turned off my phone. Yesterday, it was 5 missed calls from my mom. I knew I was making people worry (or for those waiting outside of my apartment that one time, angry), but as all memory of those moments disappeared the next day, I didn’t exactly feel guilty about it. As far as they knew, it had never happened, so why should I lose any sleep over it?

Right now though, I was regretting that decision. I could have used the heads up. There was a deathly-still silence throughout the whole meal. My dad barely touched the pot-roast my mom had prepared, and only nibbled on a bit of brie when the cheese platter was brought out.

I studied him. It was odd, but somehow having spent the past few weeks people-watching all over Europe, I was able to see things about my dad that I had never noticed before. There was something broken about him now. He was losing his faith in a system that he had trusted completely and utterly, like a believer being presented with the proof that God didn’t exist. He had wholeheartedly embraced France’s social contract, and that system had failed him. The long hours dedicated to his work to ensure that after a life well lived, he would be able to harvest the fruits of his labor seemed to grow more distant.

He excused himself before dessert was brought out, saying he was tired and was going to take a nap. He thanked Lara and me for coming, and headed upstairs to their bedroom.

“Wasn’t there cake?” asked Lara, “And what do I do with the present I got him?”

My mom looked at her sadly. “Bring it next time,” she said, “He’s not up for this now. I’ll keep the cake in the fridge and you can come back next weekend.”

I helped clean up the table, grabbed a banana for dessert as I chatted to my mom about her class, and decided to head home a bit earlier than planned. Cedric and Hanaa were coming over later, and I could use the extra alone time to process what had just happened.

 

 

“The whole thing is a giant Ponzi scheme,” said Cedric.

I poured him a Vedett from the tap, and handed it to him. Cedric was seated on one of my La-Z-Boys, while Hanaa sat on the black leather couch, blowing the smoke from her cigarette out the window.

“What’s that?” I asked.

“You don’t remember the whole Bernie Madoff scandal in 2008?” asked Hanaa.

“2008? In 2008 I was 14. My biggest worry was getting laid,” I answered.

“And you weren’t any good at that either,” scoffed Cedric.

“Shut up,” I said, “Seriously. What’s the Bernie Madoff scandal?”

“Dude, a Ponzi scheme,” said Cedric, rolling his eyes at my ignorance, “It’s when you pay off the first people using money from the following people.”

“What?” Hanaa blew out smoke in exasperation and cut in, “That’s literally the worst explanation I’ve ever heard. Look, it works like this. Let’s say Cedric is the mastermind of the Ponzi scheme.” Cedric put on a devilish grin. “He comes to you with a great investment opportunity. If you give him 100,000 euros, he guarantees that he’ll get you a 20% return next year”

“That sounds pretty good,” I said.

“And it is,” said Hanaa, “And it seems even better when a year later, Cedric gives you 20,000 euros.”

“You’re a good guy,” I said, clinking glasses with him and laughing.

“But he’s not,” continued Hanaa as she rolled her eyes, “Cedric is fucking lazy. He didn’t do shit with your money.”

“Then where did the 20k he gave me come from?”

“He took them from the 100k euros you gave him. So now he only has 80k left.”

“Well what if I ask for the 100k back? Then he’ll be caught out.”

“First off, you won’t. He’s giving you 20% every year! You’re gonna keep your money with him. The problem comes later. If he gives you 20k every year for five years, then he runs out of money right? But you’re still expecting your annual 20k.”

“Right,” I said, nodding.

“But it’s such an amazing opportunity that of course you’ve told all your friends about it. Word starts to get out. And more and more people come to Cedric to give him money to invest.”

“So when it’s the sixth year, you still receive your 20k. This time though, Cedric is paying you 20k from the money of the newer investors. And of course he’s taking a cut for himself.”

“Ok, so as long as he keeps finding new investors, and no one asks for their money back, he’s safe,” I said.

As long as,” said Hanaa, using air-quotes, “The whole thing is unsustainable. It’s not about if, but when, the whole thing collapses. And when it does a whole lot of people suddenly discover that all the money they thought they had no longer exists. In the Bernie Madoff scandal, he lost something like 70 billion dollars for investors, but made himself a cool billion in the process.”

“Wow,” I said, “Holy fuck.”

“Man,” complained Cedric, laying back on the couch, “Fuck being a pilot. I should start a Ponzi scheme. Imagine what I could do with a billion dollars.”

“Well,” said Hanaa with a sly smile, “You could do like Bernie and get 150 years of prison.”

Both Cedric and I emitted a low whistle.

“OK,” I said, “So basically you pay off the old investors with the money from the new ones. What does that have to do with the retirement system?”

“The whole government thing is a scam,” said Cedric, jumping in with his usual anti-system rhetoric.

Hanaa gave him a cold hard stare, and he meekly returned to sipping his beer. I settled down opposite her into one of the La-Z-Boys.

“For once,” she said, accentuating the words as she continued to stare Cedric down, “He’s actually not that wrong. The French retirement system works in almost exactly the same way. Active workers pay money for their retirement to a pension fund, and that pension fund immediately turns around and gives that money to the people that have already retired.”

“When France set this system up after World War II,” she continued, “The system worked great. For each retiree, France had 3 people actively working and paying money into the system. So after paying out all the pensions, like the 20,000 euros in the Cedric scam example, the funds still had lots of money. They invested that for the future, and made even more money.”

“I see where this is going,” I said, “The problem is that people are living to be older and older, and having less and less kids.”

“Yeah, but it wasn’t as obvious back then. So now France has less and less people paying into the system, but more and more people that it needs to pay for. Right now, it’s 1.2 people working for each retiree instead of 3.”

“Fuck.”

“You see the problem. Now when things started to get bad about 20 years ago, the funds just dipped into their savings to pay out. They had made so much extra money since 1945, that was what it was for right?”

Hanaa pulled out another Dunhill from her pack, lit it from the one she had just finished smoking, and then put the stub out in the bamboo ashtray I had set out on the glass table.

“Now I need to remember this because it’s been a while since I studied this…” she said, blowing out smoke, “Basically the situation started to get worse and worse for all the pension funds, but especially so for the funds covering private sector employees.”

“You used to have two funds, the AGIRC and the ARRCO. They were losing billions of euros every year, and quickly burning through their cash reserves. It got so bad that AGIRC completely ran out of money two years ago. But ARRCO still had cash, so the government ordered them to merge into a super pension fund so that AGIRC could tap into ARRCO’s money pile. And obviously, just to make my life a lot easier, they merged those stupid ass names into an even more complicated one, AGRCOC, Association Générale pour le régime de Retraite Complementaire des Cadres.

“That’s my dad’s one right?” I asked.

“Yeah,” she said, “And it’s yours too. As far as I know you work in the private sector as well.”

“WHAT?” I asked, shocked, “You mean my pension’s gone?”

“Relax you idiot,” said Hanaa, “You’ve only paid into it for two years, and I’m pretty sure the whole thing is a bluff anyways. Hear me out.”

“The problem with the merger of AGIRC and ARRCO was that this was just kicking the can down the road,” she continued, “The new super-fund, AGRCOC, now had the same pile of money as ARRCO but was spending it twice as fast because they had to cover AGIRC’s losses too.”

“And so they ran out of money last month?” I asked, “And that’s why they’re no longer paying?”

“Dude,” said Hanaa, “They ran out of money last year. They’re spending something like 100 billion euros on pensions a year and losing 10 billion euros in the process. So at first, they took on debt, hoping the government would help out. They increased the amount of money the working population had to put into the system. They pushed to increase the retirement age. But when you’re losing close to a billion euros a month, there’s only so much you can do. And there’s only so much you can borrow.”

“When they weren’t able to borrow anymore, and the government didn’t kick in to help, they stopped everything. But as I said, I’m 99% sure this is a bluff. They stop paying for a month, and push the government to step in when everyone starts to freak out. ”

“Couldn’t they just have paid a bit less to everyone?” said Cedric, “Money’s still coming in, you just make sure you don’t spend more than you have. Better than paying out nothing at all.”

“It’s a legal nightmare. The amount of money you’re supposed to pay is defined by law. If they don’t pay everything, they can get sued. It’s absurd, but it’s actually easier for them to just declare bankruptcy than to pay less. Even if they fuck over the entire private sector in the process. Not to mention that it’s a much more effective way to force the government’s hand.”

I thought about it. So that explained why my dad said he found out about it when his usual payments to AGRCOC hadn’t been deducted from his paycheck.

“My dad said he only lost half his pension?” I half-asked, half-stated.

Hanaa rolled her eyes yet again.

“You really want to go down the retirement system rabbit hole? I swear, I almost tore out my eyes learning about this thing.”

“Come on, you’re the smart one,” I teased, “Who am I gonna ask, Cedric?”

Cedric slammed his empty beer glass on the table in protest.

“No, but you are going to get me another beer for that,” he stated, “Or no 20% for you!” I laughed, picked up the glass, and went to pour him another Vedett. Hanaa continued her explanation.

“Ok, I need to take a step back a bit to explain this then. At the very foundation of the French retirement system is this mega-fund called the CNAF. It’s the first part of everybody’s pension, and it’s directly linked to the state. Now, if you’ve paid into the CNAF for the right amount of years, it basically guarantees that you get 50% of the average of your 25 best annual salaries. It works the same as all the other pension funds: it takes money from active workers and gives it straight to retirees.”

I brought Cedric a beer and pointed at Hanaa’s empty glass on the table. She nodded, so I picked it up and went to fill it up as well.

“Now the fun part. On top of the CNAF payment, there’s something called complementary pensions. They depend on each industry. So for your dad, it’s AGRCOC, because he works in the private sector. And France being France, you have a ton of different ones. 35 in total.”

“35?” I asked, incredulous, “Shouldn’t it be 2? One for private, one for public?”

“Nope,” said Hanaa, “Because just like French grammar, you have a ton of exceptions. Quick question: what’s the official retirement age in France?”

“I don’t plan on retiring,” said Cedric, “I plan on dying in one of those Cessnas at the ripe old age of 28.”

“65?” I ventured.

“65 for the private sector, that’s correct. But if you work for EDF, France’s electricity giant? 50 to 55 years old, depending. And you get bonuses on your pension. Work for SNCF, the railroad company? Same thing, and your entire family gets to ride on European trains free for life.”

“You have got to be kidding me…” I said, sitting down in the La-Z-Boy.

“Doesn’t stop there. All of these are losing money too. The CNAF, the 34 other complementary pension funds. But a lot of these are facing other pressures. For example, there’s a pension fund for farmers. Now thirty years ago, there were a ton of farmers. Now they only represent 5% of the population. So if you have to pay farmers’ pensions with current farmers, you’re completely fucked. So what do you do?”

“Transfer funds from other pension funds that have more people?”

“In theory yes. That’s French solidarity, again, in theory. But what happens if you try to take them from EDF, or SNCF, or the teachers union? Bam, they go on strike,” she slammed her fist into her open hand to mark her point, “No more electricity. No more trains, no more subways. No more schools. And you can’t even take it from one at a time. You try to take it from just the teachers, and you see French solidarity in action this time. Everyone goes on strike anyways, because they know they might be next.”

Here Hanaa paused, and put out her second cigarette by crushing it into the bottom of the ashtray.

“So you hit on the people who complain the least. You take from the private pensions. That’s the worst part: a big chunk of AGRCOC’s losses are because they pay billions into the other pension funds. It’s a wonder they didn’t go bankrupt earlier.”

I thought about it. For the first time in many a Day B, I took Hanaa’s pack from the table and lit a cigarette. I immediately felt that pleasant tingling in my fingertips as the buzz set in.

“Well, at least my mom’s pension is safe. And half of my dad’s,” I said.

Hanaa looked at me with a deep, penetrating stare.

“Dude. They’re losing just as much money. It’s only a matter of time.”

“That’s why I don’t pay for my retirement!” piped in Cedric, clearly annoyed at being ignored, “By the time I’m old, there won’t be any money left!”

“No,” said Hanaa in a slightly annoyed tone, “You’re paying, it’s just taken from you before the money ever reaches your account. Your employer is paying it, whether you want to or not. This isn’t an opt-in system.”

We sat in silence for a while, drinking and sipping our beers. The conversation had gone dark, which wasn’t usual for when we got together. Cedric picked up one of the remotes, and turned on the TV.

“Whatever,” he said in a lighter tone, “That’s a problem for tomorrow. Come on, grab a remote guys, I’ll kick your asses at MarioKart.”

Hanaa laughed and picked up the remote: “Not if you keep picking Peach just to stare at her ass on the motorcycle.”

I laughed. It was a problem for tomorrow. For tonight, I’d just focus on being with my friends, and the ever-problematic Rainbow Road track.

 

~ End of Chapter 11 ~

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