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The French economy suffers from serious handicaps, resulting almost entirely from political decisions, dating as far back as the 1970s: In 1973 France had the third highest GDP per inhabitant in Europe. Now it has the fourteenth!
Government after government has repeatedly emphasized demand-side policies. Nearly all high level decisions have been made to the detriment of business and production. France is, by far, the country where companies are subject to the heaviest fiscal pressure. This is true not only for corporate taxes, but also for taxes on production and for the heavy burden on employers due to their share of social contributions. It is also the country where a full-time employee works the least over the year. To say that a structural weakness weighs down France’s productive system is an understatement.
In a globalised economy, these handicaps come with a high price. The good news is that France is not the first country to face this situation. Others before have experienced it. But they have demonstrated the capacity to reverse the trend. These phoenix countries, from New Zealand to Germany to Sweden to Denmark, are neither tax havens nor social hells. They have each, in their own way, reinvented themselves and shaped a fiscal, democratic and consensual environment that gives their companies every chance, while often being world leaders in environmental, social, and corporate governance issues. France can draw inspiration from these countries.
It is time to unleash the French Phoenix.
https://www.henri-lagarde.net/
