Backlash against Le French bashing



So is France's economy really in such a woeful state?

The answer, according to a 14-page report by The Economist, is a resounding yes.

There was no mincing of words. While Greece, Portugal, Spain and Italy remain in trouble, the magazine said, the looming French crisis "could dwarf any".

It cited familiar symptoms of France's malaise: central government consumed 57 per cent of GDP, the highest in the euro zone; failure to balance the books since 1981 that meant public debt has soared from 22 per cent of GDP then to 90 per cent now; higher taxes on companies, wealth, capital gains and dividends; a higher minimum wage and a "partial rollback of previously accepted rise in the pension age"; and too many firms uncompetitive with the country's "bloated government" living beyond its means.

"For years [France] has been losing competitiveness to Germany and the trend has accelerated as the Germans have cut costs and pushed through big reforms," said The Economist.

"Without the option of currency devaluation, France has resorted to public spending and debt."

The French are often portrayed, as much by themselves as others, as masters of the art of complaining. But they do not take kindly to being told what is good for them.

Salt was rubbed into their wounds because the source of the criticism was a publication regarded as influential among the world's decision-makers.

Even before The Economist weighed in, Pierre Moscovici, the French finance minister, was voicing government dismay at alarmist portrayal of François Hollande's first forays into solving France's crisis.

"What is worst thing for me is to read in the newspapers that the exile begins, businesses flee," he said at an employers' conference in Paris. "The French-bashing [he used the English phrase] is frightening."

And as The Economist showed when it hit the newsstands a few days later and other free-market pundits joined the attacks on France, there is little immediate prospect of the world taking a rosier view.

Countering such views, Agnès Catherine Poirier, a well-known French journalist, used her column in The Guardian, a British newspaper,to argue that The Economist, the financial markets' "bible", shared with the Financial Times an inability to appreciate, let alone understand, France's exceptions. "The central role of the state is, for those market-friendly publications, anathema," she wrote.

"France is bound to collapse at some point, it is inevitable. And yet, despite the [fictional] 'Little Ultra-Liberal Guidebook's' rules, France is still standing."

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