French Economy Stuck in Uncertainty

The French economy has been described as the ‘sick man of Europe’ for its painfully slow recovery since the financial crisis. While GDP growth has picked up over the past two years, the economy continues to suffer from high unemployment and uncertainty that many believe are a symptom of the country’s labor laws. A string of terrorist attacks have also curbed tourism in a country that relies heavily on foreign visitors.

Against this backdrop, France is heading for one of its most crucial elections in history. Latest polls have revealed a four-way race that includes candidates from the far left to the extreme right. French pollsters BVA recently said “all scenarios are possible,” including a victory for National Front leader Marine Le Pen, Economic Calendar reported.

According to the latest Ipsos-Sopra survey, the anti-immigration, anti-European Union leader will tie independent centrist Emmanuel Macron in the April 23 vote, prompting a run-off election two weeks later. The two candidates are only three points ahead of rivals Francois Fillon and Communist-backed Jean-Luc Melenchon.

Melenchon surged in the opinion polls last week to catch Fillon, who is under fire for paying his wife hundreds of thousands of euros for a job she didn’t perform.

Economic reforms are central to each of the candidates vying for the presidency. Macron’s experience as minister of economy makes him a favorite among French voters. He has vowed to cut both taxes and the public sector, while promoting investment for the economy of the future.

Le Pen, on the other hand, wants to protect French industries from so-called unfair competition.

Communist Melenchon is seeking more radical reforms, such as reducing the work week and implementing a massive stimulus program to rev up economic growth.

The French economy expanded at a stable pace in 2016, but came in well below the government’s optimistic target of 1.4%. The Bank of France recently trimmed the country’s growth forecast to 0.3% from 0.4%. The bank maintained its overall estimate of annual growth at 1.3%.