👉Is France’s Economy on The Verge of Collapse ?
Overall the French economy does not have a structural problem. Not quite as disciplined as the North European countries in controlling wage inflation; and not sharing with Southern Europe some of the historical problems (underdeveloped areas, etc.). Both geographically and economically in the middle. However, the unemployment level is a persistent problem, and YOUTH UNEMPLOYMENT LEVEL a specifically A French problem.
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There are two major problems in the French economy: employment and public debt.
France has high structural unemployment. Since 1996 it has never been lower than 7%, and it usually hangs around 9%.
Combine that with a below-average employment rate of around 64% (OECD average is 67%), and you understand why there is definitely an issue.
What does all that mean? Well, out of all the population, fewer french people are active compared to the rest of the OECD (have a job or look for one); and among them, fewer french people do have a job.
It means that the production effort is made by the most productive people, and the rest is excluded from the labor market. This has many impacts, but most importantly, it makes a part of the population dependant on public benefits since they don’t have income.
Why? High minimum wages, low weekly work hours, below average industrial production, education not giving skills required in the labor market, lack of capital in production investment.
That list can go on.
#2. Public debt.
France has High public debt.
In part because of the previous point, but also because of an expanded bureaucracy, the french State spends more money than average.
And this had led to higher public debt.
This is fine for now as interest rates are low, but this could prove devastating should they increase in the future.
Of course, there are many other issues: housing, education, energy, etc.
But I feel these are the two most important.
But here are some other structural problems of the French economy.
The deficit is higher than the EU goal of 3%.
Growth has been low since the 2008 crisis.
Large trade deficit.
Low productivity gains;(0.5% over five years). But it is an issue most developed countries face.
Negotiations between unions and firm representatives are sometimes difficult, ending up in strikes.
Poor professional formation of workers, leading to unemployment and difficulties at reconverting people to other growing sectors.
French small and medium businesses encounter difficulties at growing in size, which leads to low job creation and poor economic growth.
A number of smug, public servants working 35 hours a week and not a minute more. Don’t try to call on Wednesday or Friday afternoon.
The incompetent politicians.
The most substandard and elitist education system (except primary school until the age of 10). This is well established through PISA and international University rankings, yet most French people think everything is peachy.
The fact that French people look up to the State as their savior anytime something bad happens, yet complain about taxes and ineffective politicians all the time. Vote and elect competent representatives already, instead of the latest populist figurehead!
Quite a bit of racism and sexism.
Apart from that, many things are indeed correct.
I don’t find French people arrogant, quite the contrary. Most of them think that everything and everyone is better elsewhere: the US, Germany, Northern Europe, Spain or Italy, Japan, etc.
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