Here's What's In That Economist Article That Has The Nation Of France Outraged

the economist france

Photo: The Economist

As reported earlier, the latest Economist cover, with the baguette bombs has folks in France angry. Part of it may be the goofy representation of a French time bomb. But more importantly, The Economist is respected, and there have always been worries that France’s economy is more PIIG-like than core-like.So what’s actually in the piece?

Here are some key bullets from the report.

  • Public spending is 57% of the nation’s output.
  • Debt-to-GDP is 90%.
  • No new company has entered the CAC-40 stock market index since 1987.
  • Nobody gets fired. Unions protest over any reforms.
  • France still has a high standard of living, and has some of the best companies in the world, but growth has stalled.
  • Unemployment is 10%. Youth unemployment much higher.
  • France can still borrow cheaply, but it’s also resting on past laurels (it’s still a gigantic tourist destination).
  • New President Francois Hollande is ostensibly powerful, but his approval rating has plunged.
  • He refuses to really acknowledge France’s economic challenges.

Overall, it’s really not as bad as the cover suggests.

On a host of indicators, France is right in the middle of the pack: Not growing robustly, but not seeing the bottom falling out either. Hence the time bomb metaphor: The Economist is not a fan of high debt-to-GDP and rigid labour market rules. But the country still has not gotten sucked into the Southern Europe vortex.

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