A French Cure

PARIS – France is widely regarded around the world as a country that has failed to embrace globalization or to modernize its economic and social model. Its own citizens have been more pessimistic about its future than ever in recent decades. The question is, can the French map out a way forward, dispel the prevailing gloom, and rebuild prosperity?

The starting point must be a lucid diagnosis. In comparison to countries that enjoyed a similar level of development 25 years ago, France has underperformed economically. The gap is not wide – six percentage points of per capita GDP – but the trend is worrying enough to call for a correction. Unemployment, moreover, has remained at shamefully high levels. And, whereas France ranks higher for some social indicators related to health care, income inequality, and poverty prevention, the price for this performance has been a steady rise in public spending and debt.

The reason for this state of affairs is not that France’s economy lacks potential. It has weaknesses for sure – a relatively thin layer of medium-size companies, adversarial labor relations, and public-sector inefficiencies, to name some key shortcomings. But France can also build on remarkable assets: on average, its working-age population is much better educated than it was a quarter-century ago; it is younger than most neighboring countries; it is home to more global corporate champions than Germany or the United Kingdom; and its infrastructure is outstanding. The balance of assets and liabilities does not justify the gloom.

The causes of France’s malaise lie elsewhere. For starters, it is much too uncertain about fundamental choices. French society is ambivalent about its own identity, the way ahead for its social model, its attitude toward globalization, its stance on Europe – and, increasingly, even about economic growth itself.