FRANCE'S ECONOMY

The Economist published a brief outline about France's economy, showing what is actually behind disease of rachitic growth and status quo.

"In the late 1990s, France's economy grew faster than the European average, allowing the Socialist government to indulge in such goodies as the 35-hour work week. But the country's cherished social model has in recent years proved a strong disincentive to growth and to job creation. Unemployment is double that in Britain, and special public-sector pensions and rising health-care costs are straining the public finances.

Discontent with the economy—and the government’s handling of it—played a large part in France's rejection of the EU constitution. But, as usual in France, economic reforms smacking of libéralisme have met strong resistance: in the spring of 2006, after weeks of protests, the government dropped a proposed loosening of first-job contracts. Nicolas Sarkozy, elected president in May 2007, has promised reforms, although his first budget reduced neither public spending nor public debt, and his movement toward public-sector pension reforms provoked strikes."

Source: Economist, Finance & Economics Backgrounder (link)