France faces a narrow path to reconcile supply-side structural reforms and fiscal measures with demand management. The budget bill for 2019 targets a deficit at 2.8%, pretty close to the EU limit. But analysts at BoAML do not share the criticisms over lack of ambition on public spending.
Perhaps one of the most important virtues France has is the real cause of its malaise: the public services work very well, but they are tremendously expensive and financing them is eating into the rest of the country. Taxes represent 56% of GDP, even higher than in Sweden.
In an article dedicated to the French economy, Timothy Taylor makes some interesting comments on the “mystery” that is France, one of the richest countries in the world, where you can breathe opulence as soon as you arrive there. But all this implies a degree of interventionism which has its consequences.
Recent surveys in both Germany and France indicate the perception on the part of companies that there will not be the necessary stimuli for economic activity to fuel an acceleration in the economic momentum.
MADRID | By J.P. Marín Arrese | Figures for the second quarter announced by the European Commission must have exerted a soothing effect on badly mauled Hollande. Growth is back in France, even if it only amounts to 0.5%.