France in 2022: unable to take advantage of its many assets

Excerpts from Axel Ruckert’s book Make the France I love succeed, proposals from the most French of Germans”

The forces of France, often recalled, are and remain, even in the aftermath of the pandemic, numerous. Especially for citizens who, like me, frequently on the move, discover and keep in mind the very favorable image that France enjoys abroad, and who end up wondering why, with so many assets, it does not succeed No more.

And without wanting to go as far as the highly respected English newspaper, the Daily Mirror, did in October 2014, which predicted that in 2030, France will have overtaken Germany, it would be “logical” for our country to experience much better results. .

Because France displays first of all the most favorable demography among the major European countries. With still almost 2 children per woman, the current 67 million French people should reach 71 million in 2050 and soon after overtake Germany, down significantly from the 82.8 million inhabitants of today. And even if, in France as in the rest of Europe, the age pyramid will also shift more towards seniors, the number of French people “of working age” and of consuming will remain much more favorable than in other countries. .

Next, France enjoys a strong capacity for attraction and seduction worldwide. With 27 million foreign tourists in 2017, it occupies the position of world leader, and the organization of the Olympic Games in 2024 in Paris and the Rugby World Cup in 2023 will bring many additional visitors. While visiting its world-famous tourist sites (such as the Eiffel Tower, the Louvre Museum, but also the Palace of Versailles, the Loire castles, the Eurodisney, Asterix and Futuroscope parks, the landing beaches, and all these extraordinary landscapes, filmed on the passage of the Tour de France, etc.), they will appreciate the “French lifestyle” with its friendly and convivial side, its gastronomic and wine assets.

And, certainly in return for taxation and above all (too?) high social charges, and despite obvious and costly administrative inefficiencies, we tend to forget rather quickly the French health, school and university systems of high quality and almost free, so much so that they attract very (too?) many foreign beneficiaries. And then, at the start of the five-year term, thanks to a series of reforms by Emmanuel Macron, especially in terms of labor law and training, and the President’s initiatives to promote France and its assets (cumulating in the “choose France » and the repeated reception of the bosses of the big world companies at the Palace of Versailles), the attractiveness of France for foreign investment has started to rise again.

On the other hand, the French industrial picture is more contrasted, and there are strengths alongside obvious weaknesses. On the positive side, the large number of large groups in the peloton of European and even world leaders (Airbus, Arianeespace, L’Oréal, LVMH, Kering, Hermès, Chanel, Danone, Pernod Ricard, Renault, Peugeot, Michelin, Air Liquide, Sanofi , Veolia, Publicis etc.); a system of rather solid banking and financial institutions (Crédit Agricole, BNP, Société Générale, Banque Populaire, CIC, AXA, etc.), clearly superior to that of Germany. And also French-style artisanal excellence for traditional products (porcelain, glassware, leather, tapestry, lace, fashion, etc.) with a know-how to be passed on from generation to generation. Then the 996,000 companies created in 2021 testifying to a strong momentum for entrepreneurship. And, as shown by the French participation in CES, the annual benchmark exhibition for new technologies in Las Vegas in the United States, a large number of start-ups and entrepreneurs, of which no less than 25 have become “unicorns” and parties to the conquest of Wall Street.

All this supported by well-developed infrastructures (5G internet, TGV, tunnels, road network, etc.) and an energy cost, certainly based on the high proportion of nuclear power (70%) and before the constraint of wanting to free itself from gas Russian, among the lowest in Europe.
On the negative side, France’s inability to avoid, unlike Germany and even Great Britain, significant deindustrialization linked to the numerous factory closures in France and the relocation of production sites to low-cost/low-wage countries .

And above all the inability to develop a large slice of medium-sized companies (ETI) and of family origin (like the Mittelstand, the real industrial force of Germany), competitive, solidly financed and strongly exporting.

On the labor side, an hourly productivity among the best in the world…and a cost whose difference, especially compared to Germany, is once again positive. But working time and a period of activity shorter than that of most of our neighbours, especially compared to countries that have raised the retirement age to 65, or even gradually to 68. An unemployment rate, albeit down to less than 8%, already down before COVID and then, after a temporary upturn, down even steeper since the economic recovery, but still double Germany. With, above all, a very large number of unemployed young people, dropouts and without any training (where Germany succeeds thanks to its apprenticeship system) and a lower proportion of active people among seniors.

France’s management of COVID adds further ambiguity to this mostly positive observation: on the one hand, the country has sunk more deeply into the crisis, and the decline in GDP has been greater than in Northern Europe, Germany included, and this despite unprecedented financial aid from the government and the European Union. On the other hand, its growth rate, at least over the 2021/2022 period, will be one of the strongest in European countries, despite certain temporary shortages of materials and components.

But where does this inability of France to take full advantage of its strengths and post better economic performance, in terms of growth, balance of trade, unemployment and debt, come from? I would deplore at least three major brakes.

First, the absence of a coherent overall economic program with, in addition, a medium and long term vision. France advances and retreats in fits and starts and by ad hoc measures, often urgently under pressure. French politicians, with frequent political changes, react more often than they act. As, for example, in tax matters, where investors need long-term visibility, French policy multiplies permanent and unpredictable changes.

Secondly, the absence of a national consensus, especially in terms of social balance. The frequency of social conflicts, within companies but also within French society in general, prevents serene development focused on shared objectives.
On the one hand, progress in terms of labor law (job protection plans, contractual terminations, training account, relaxations, etc.) have undeniably provided ways to facilitate, if necessary, structural adaptations . On the other hand, the number of strikes, where France continues to hold international records and where minorities with the greatest capacity for nuisance, often take the majority of French people, desperate, hostage (schools, SNCF, road transport , garbage collectors, etc.), thus continuing to fuel the perception of a troubled country that cannot be reformed.

Finally and thirdly, still very present in the French mentality, a very ambiguous relationship with success and money which, for many French people, rightly or wrongly, is not a real objective in life and therefore a driving force behavior on a daily basis. Earning a lot of money is, for a footballer or a star of show business, normal, but it is necessarily “suspicious” to become rich or, even worse, to be born and remain rich by inheritance.

Let’s be clear: to make France succeed, on a national, European and global level (because globalization will continue…), in the short, medium and long term, to make it benefit more from its many assets, to regain better social cohesion. within a peaceful country, and to make the French less depressed, less pitted against each other and likely to regain the ability to be happy, major changes, sometimes very radical and innovative, will be desirable, even essential. The rest of this book offers a large number of them, and their implementation, ideally from the first 100 days of the next legislature, is essential.

Axel Ruckert

Excerpt from Axel Ruckert’s book ” Make the France I love succeed, proposals from the most French of Germans”