Keychain ornament of the Eiffel Tower

The French Exception?

A healthy French economy would do wonders to help lift the eurozone out of its malaise and could provide an example to countries everywhere of how inclusive capitalism can work. But that assumes that the government will embrace the structural reforms that France’s economy so desperately needs.

PARIS – More than ever, the French economy is at the center of the global debate about how far one can push the limits of state size and control in a capitalist democracy. To those on the left, France’s generous benefits and strong trade unions provide a formula for a more inclusive welfare state. To those on the right, France’s oversized and intrusive government offers only a blueprint for secular decline. For the moment, the right looks right.

Once nearly the economic equal of Germany, France has fallen well behind over the past decade, with per capita GDP now about 10% lower. France may punch above its weight politically, but it punches far below its weight economically.

Whenever someone proposes turning the eurozone into a transfer union, as France’s economy minister, Emmanuel Macron, recently did, the presumption is that Germany will carry everyone else on its shoulders. But why should only Germany have that responsibility? France’s economy is roughly three-quarters the size of Germany’s. Persuading the Germans that the French are willing and able to pay their fair share could make room for a lot of necessary compromises that until now have seemed impossible.

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