World Economy

‘Three Diseases’ Stifling French Economy

‘Three Diseases’ Stifling  French Economy ‘Three Diseases’ Stifling  French Economy

First they spoke of an imminent decrease in unemployment; then, of a decreasing increase. Now, halfway through their term and with jobs still shedding, France’s ruling Socialists vow to “speak the truth” about the economy – and it doesn’t sound good.

The truth is, “France is sick”, the new economy minister, Emmanuel Macron, is fond of repeating, France 24 reported Saturday.

Casting himself as doctor-in-chief during a press briefing, the 36-year-old former investment banker singled out “mistrust”, “complexity” and “corporatism” as the “three diseases” he believes are stifling France’s economy.

The remedy, he said, requires “lifting all blockages” that hold back the economy, “shattering glass ceilings” and “changing mentalities”.

Beyond the fiery rhetoric, Macron unveiled a first batch of proposed reforms designed to tackle France’s jobless rate, which has gone over the symbolic 10% mark.

These include plans to lift long-established restrictions on Sunday trading, open intercity bus transport to competition, and “liberate” highly regulated professions in the health sector and the judiciary.

“By over-protecting, we end up protecting nothing,” Macron told reporters, opportunely quoting France’s brand new Nobel laureate for economics, Jean Tirole.

“It’s striking and, frankly, somewhat ridiculous,” said Michel Husson of the Paris-based Institute for Economic and Social Research (IRES), in an interview with France 24.

While conceding that the minister’s plans to heal the French economy were still only in their infancy, Husson described Macron’s first proposals as “timid”, “peripheral” and “disproportionate” relative to France’s economic woes.


French lawmakers are not expected to vote on a future “Macron bill” until the spring of next year.

But with the government’s popularity at rock bottom and EU officials breathing down its neck, France’s embattled President Francois Hollande has urged his ministers to step up their reformist oratory.

Since entering the government in late August, Macron has proved especially zealous, instantly becoming a fixture of French news reports.

Le Monde has described him as “being on the move at all cost, whether or not the exact direction is known”.


According to Ivaldi, Macron’s provocative statements are largely aimed at officials in Brussels and Berlin, whose patience with the French government’s bloated budgets is wearing thin.

Macron’s press briefing on Wednesday was timed to coincide with an EU deadline for France and other Eurozone members to submit their draft 2015 budgets to the European Commission in Brussels.

The country is struggling to bring its budget deficit back down to the 3% ceiling mandated by the EU and has repeatedly missed the target.

Despite announcing €50 billion ($63.8b) in spending cuts over the next three years, the French government has once again warned it will be unable to meet EU requirements, meaning the Commission could reject its draft budget and tell France to change it or face a fine.

“Nobody wants this to happen,” says Ivaldi, “which is why [German Chancellor Angela] Merkel has offered a way out: Europe will accept France’s budget as long as Paris commits to wide-ranging reforms.”

Finding a way out of the economic doldrums, however, is another matter.