Seen from here, everything encourages gloom. A pension reform has put the country in turmoil, even though the French are among the world champions in terms of average time spent in retirement. Urban violence, following the death of Nahel, will leave a bill of at least one billion euros. For the first time, the French public debt exceeded 3000 billion euros. But, in this period of national self-flagellation, it is not useless to consult the foreign press to cheer up. The Economist has thus just devoted a long article to the “hidden successes” of France. For the venerable British weekly, “one of the great mysteries of present-day France” is not our irrational consumption of frogs or putrid cheeses, but our economic survival despite record social spending or a revolutionary mentality. “A country that has an aversion to change, a talent for revolt and an immoderate taste for taxes still manages to do a lot of things well” observes The Economistwhich recalls that since 2018, the cumulative growth of French GDP, although modest, is twice as high as in Germany, and exceeds that of its large British, Italian and Spanish neighbors.
Sam Bowman, co-founder of the digital magazine Works in Progresshas him too, in a remarkable analysis, tried to unravel this French mystery. “I used to ask myself: why is France so rich? Despite notoriously restrictive labor market regulations and high taxation, post-war France has always been as rich as the UK, if not richer. And it is significantly more productive, even taking into account France’s higher unemployment rate.” For Sam Bowman, “France is wrong about so many things, and yet it is doing quite well in the areas that really matter”.
TGV, nuclear and childcare
So what is our secret, according to these Anglo-Saxon observers? First of all, there are high-performance infrastructures, the legacy of wise historical decisions. As reminded The Economist, with 2800 kilometres, our high-speed train network is one of the largest in the world. Sam Bowman points out that 29 French cities have a tram network, compared to only 11 in the United Kingdom. He also salutes our motorway network: “France has nearly 12,000 km of motorways, compared to around 4,000 km here, and French motorways tend to be smoother and better maintained (and three-quarters are tolls, which which makes traffic jams much less of a problem).”
Second key: abundant and more carbon-free energy than our neighbours. “France produces some of the least carbon-intensive electricity in Europe, thanks not to renewable energies but to its nuclear industry, launched in the 1970s” notes The Economist.
France also has social assets compared to other major European countries, with in particular much more affordable and widespread childcare, as well as a much lower poverty rate. Our unemployment rate, at 7.1%, is at its lowest for fifteen years. “Despite Mr. Macron’s reforms, the French state still collects more taxes as a percentage of GDP than any OECD country except Denmark, and spends more money on social spending. ” underline The Economist.
Political stability
But the liberal magazine also highlights much more capitalist successes, particularly in luxury, our great comparative advantage: “France has more companies in the world’s top 100, measured by market capitalization, than any another European country. It owes much of this to its luxury giants, whose profitability and scale have surged over the past decade. In 2022, French luxury brands were more profitable than American tech companies.” These successes are not limited to leather bag exports. “France is also home to one of the most valuable banks in the eurozone, BNF Paribas. Between 2017 and 2022, the country increased its share of global arms exports by four points, to 11%. Last year, France has filed more patents than the average of its large European neighbors, and nearly twice as many as Great Britain.On a wooded plateau south of Paris, the government is investing billions in an innovation hub around Saclay, destined to become a “French MIT” continues The Economist. Even if our country is behind in this respect compared to the British and the Germans, it has succeeded, three years in advance, in fulfilling a Macronian promise by reaching in 2022 the number of 25 unicorns (start-ups valued at over $1 billion).
Finally, The Economist welcomes the political stability which, according to him, has made it possible to increase the economic attractiveness of France: “Mr. Macron is the first president in twenty years to be re-elected. Bruno Le Maire was Minister of Finance for the longest period consecutive under the Fifth Republic. The two men promised not to raise taxes and stuck to it. The annual conference of major foreign bosses, invited by Mr. Macron to “choose France”, has turned into a elite event This year, more than 200 of them dined in Versailles and jointly announced 13 billion euros in additional investment Morgan Stanley nearly doubled its workforce in Paris Pfizer doubled its investment in the country to increase it to 1.2 billion euros over the next four years.”
Simon Kuper
Even the situation in the suburbs may not be so dire. In the FinancialTimesthe columnist Simon Kuper, who lives in Paris, highlights positive developments. Starting with the drop in the homicide rate in Greater Paris, down from 4.8 per 100,000 in 1994 to 1.2, the same as in London, and much better than in New York (5 per 100 000). “At the same time, the unemployment rate in the Paris conurbation fell to 6.6%, its lowest level for fifteen years” emphasizes Simon Kuper. According to him, the 68 future stations of Greater Paris, Europe’s largest infrastructure project, will further improve the situation by better connecting the capital to its outskirts. Conclusion of the columnist: “I bet on the suburbs.”
Of course, our country does not succeed in everything, far from it. “There are real concerns about the level of public schools and regional access to health services. Politics remains polarized and society anxious. Average real wages have remained stable and have not increased like in the United States. French subsidies and all infrastructure projects are exorbitantly priced.Public finances are under severe strain, in part because of caps on energy bills aimed at protecting consumers from the crisis in the cost of living, which does not fades only slowly” summarizes The Economist, which reminds us that our country has not had a balanced state budget since the birth of its current leader, Emmanuel Macron. “Yet as the French board super-fast trains en route to their enviably long summer holidays, the French model continues to defy those predicting its collapse.”