Sunday, December 29, 2019

Is France's Economy on The Verge of Collapse ?

Overall the French economy does not have a structural problem. Not quite as disciplined as the North European countries in controlling wage inflation; and not sharing with Southern Europe some of the historical problems (underdeveloped areas, etc.). Both geographically and economically in the middle. However, the unemployment level is a persistent problem, and YOUTH UNEMPLOYMENT LEVEL a specifically A French problem. Welcome to The Atlantis Report. There are two major problems in the French economy: employment and public debt. #1. Employment. France has high structural unemployment. Since 1996 it has never been lower than 7%, and it usually hangs around 9%. Combine that with a below-average employment rate of around 64% (OECD average is 67%), and you understand why there is definitely an issue. What does all that mean? Well, out of all the population, fewer french people are active compared to the rest of the OECD (have a job or look for one); and among them, fewer french people do have a job. It means that the production effort is made by the most productive people, and the rest is excluded from the labor market. This has many impacts, but most importantly, it makes a part of the population dependant on public benefits since they don’t have income. Why? High minimum wages, low weekly work hours, below average industrial production, education not giving skills required in the labor market, lack of capital in production investment. That list can go on. #2. Public debt. France has High public debt. In part because of the previous point, but also because of an expanded bureaucracy, the french State spends more money than average. And this had led to higher public debt. This is fine for now as interest rates are low, but this could prove devastating should they increase in the future. Of course, there are many other issues: housing, education, energy, etc. But I feel these are the two most important. But here are some other structural problems of the French economy. The deficit is higher than the EU goal of 3%. Growth has been low since the 2008 crisis. Large trade deficit. Low productivity gains;(0.5% over five years). But it is an issue most developed countries face. Negotiations between unions and firm representatives are sometimes difficult, ending up in strikes. Poor professional formation of workers, leading to unemployment and difficulties at reconverting people to other growing sectors. French small and medium businesses encounter difficulties at growing in size, which leads to low job creation and poor economic growth. A number of smug, public servants working 35 hours a week and not a minute more. Don’t try to call on Wednesday or Friday afternoon. The incompetent politicians. The most substandard and elitist education system (except primary school until the age of 10). This is well established through PISA and international University rankings, yet most French people think everything is peachy. The fact that French people look up to the State as their savior anytime something bad happens, yet complain about taxes and ineffective politicians all the time. Vote and elect competent representatives already, instead of the latest populist figurehead! Quite a bit of racism and sexism. Apart from that, many things are indeed correct. I don’t find French people arrogant, quite the contrary. Most of them think that everything and everyone is better elsewhere: the US, Germany, Northern Europe, Spain or Italy, Japan, etc. You do have to try to speak a bit of french, but if you do, people are really helpful and friendly. France has a great way of life. Work to live and do not live to work. Food & Wine: great French people are not a prude or feel the need to be politically correct all the time. Healthcare is great. It’s fantastic for kids or the elderly and only very good for everyone else. Great cultural depth and width from pre-history to modern times. France has a great Cinema! Graphic novels! And Fine arts. A moderately complete tour of the Louvre takes a couple of days, at least. I like the fact that most French people are Cartesian. You can have a reasonable conversation with almost anyone. Life in France is not so bad. It’s comparable to most western countries. But it’s far from a dream. Living as a lower class citizen in France is difficult. You get “free” money from the State, but insecurity, lack of education, and few economic opportunities keep you poor and resentful. You will never have a stable job that pays well. At least, you won’t die because of a lack of money since healthcare is “free.” For lazy people, one might say it’s not so bad. But your future is non-existant. That’s why France suffers from violence; people without a future tend to be unruly. Being middle-class in France is doing all the hard work while the state takes half of what you earn. For some people, it’s not so bad, but abandon any hope of getting rich. Thirty-five hours a week does not seem much, but it actually means doing 40 hours work in 35 hours. So work faster! You will live a peaceful life where nothing extraordinary happens. Your entertainment will be limited since you won’t get a lot of money, so be prepared to watch lots of TV or youtube videos. If you lose your job and you do not have a good degree, you have to find a job in the next year, or you will go back to lower-class status. That’s the problem with high unemployment. There will always be someone better than you if you stop working for a long period of time. It only starts to get good once you are from the upper-middle class and above: living in a good neighborhood in big cities, or in peaceful towns doing junior manager work. Then you can enjoy the “french way of life”: delicious food and entertainment, your environment is pretty clean and neat, you will never encounter lower-class citizens where you live, so there won’t be much violence… and you make enough money to start a business later on if that’s your choice. Foreigners think that all french people live like upper-middle-class, but that’s just a small part of the population. As a last note, French society is deeply hierarchical. Inherited from centuries of absolute monarchy, lower-class citizens have no choice but to endure the hardships imposed by the upper class. The famous Revolution changed nothing but putting different people in the same positions of power. If your manager says you should do something, you better do it without complaining even if it’s completely stupid. The system sucks? Deal with it. There is no other way than to obey. You can’t make your own adventure in France as you could elsewhere, everything will be in your way to stop you from trying. You don’t like school? Too bad because it will never change, and you will end up as a lower class citizen. No degree = no good job (or even job at all). You don’t like your work and want to change? Too bad. There are 5000 more people ready to take any job, good luck with the competition. In France, you can’t really get fired unless you make a huge mistake, so staying at the same boring job is often the best solution. If you do get fired for economic reasons, then enjoy your one year paid holiday by the State. You want to start your own business? Do you know the 5000 pages of law required to operate a business? Are you ready to pay half of your business income to the State? Do you know that the wages of someone are only half the cost? Do you really want to fight the big behemoth that is the French administration? Sure there are exceptions, and some manage to survive and even grow outside the most common path, but they are what they are: exceptions. If you want freedom, you will not find it in France. You would have better luck in the Anglo-Saxon world. If you want a safe, peaceful and boring life, then, by all means, go to France. The price of the security is always freedom. Here are just a sampling of comparisons between France and the USA. They speak for themselves that I do not even need to comment on them. Income Inequality Rating : France, 22nd; USA 3rd, the worst in OECD. Percentage of Population below Poverty Line: France, 8%; USA 18%. Prisoners per one thousand inhabitants: France, 1; USA 7.2 (World #1). Murders per 1 Million inhabitants : France , 10.4 ; USA 40.5 . Rapes per 100 thousand: France, 15.6; USA 27.8. World Health Organization Ranking of health care systems: France, #1; USA #37. The rank of health care delivery efficiency: France, #15; USA #50. Hospital Beds for 1 thousand people: France, 7.1; USA 3.3. Infant Mortality per 1 thousand live births: France, 4.8; USA 6.5. Life Expectancy at birth: France, 82.9 years; USA 78.9 years. Obesity Percentage: France, 18%; USA 34% of population. Renewable Power Generation/Total (not including nuclear): France , 17.5% ; USA -14.3% . Percentage of electrical power generated on nuclear power grid: France, 75%; the USA,19%. Electricity generated by oil per capita: France, 49-kilowatt hour; USA 93 kilowatt-hour. Transport Inefficiency : France ,#47 ; USA ,#18 . The number of passenger vehicles per one thousand population: France, 490; USA,470. France runs the TGV high-speed train network to 250 cities across the nation at speeds of 200mph: one of the fastest and most efficient in the world. The USA has Amtrak: the laughingstock of the developed world. The whole world’s economy is under stress due to three phenomena : #1. The technological revolution, changing and rendering obsolete many people’s education. #2. The globalization is resulting in increased competition in most industries, with the Chinese ascending in ever more sophisticated economic segments. #3. President Donald Trump, who uses the full power of the dollar currency in an unpredictable and ever-changing way. These circumstances are expressed in two ways : Mounting nationalisms and the revolt of the have-nots in many countries. Gyrations of the Stock Exchanges that are artificially maintained by cash injections from the Central Banks. Under these circumstances, France is RATHER MORE STABLE THAN MOST COUNTRIES. Its economy is quite diversified and reasonably shock resistant : agricultural production-oriented to high quality produces. Labor force well educated. Unemployment stubbornly high but rather well indemnified; The Yellow Vest marches actually included few unemployed. The industry is strong in many little competitive sectors: luxury goods, water treatment, industrial gases, electrical infrastructure. Many more, where some French firms have a leading position. Public infrastructure and public services amongst the world’s best. CONCLUSION. France is not fragile, although it lacks in dynamism. France has its problems. The culture of France has always been to make it difficult or impossible to unite behind anyone, be it Vercingetorix, Napoleon, or any lesser leader like De Gaulle. Gauls are first cousins to Celts who could never be kept together in groups bigger than just a band. Even French sports teams act like shooting stars, bright for a moment of glory, then internally disintegrate. With More than 80 million tourists; numerous UNESCO sites; oldest vineyards; great education system; one of the strongest military; exotic food; world-famous cheese; 300+ million french speakers globally; tolerance to all the religions and cultures and tour Eiffel I don’t think a country can be overrated. Home to Victor Hugo; Napoleon; Zidane; Coco Chanel; Louis Vitton; what else even a dreamer can ask for! World-famous brands, perfumes, clothes, shoes, cars, architecture, and beautiful french riviera! I would go one step further and mention it is underrated. France would be the most beautiful, adorable of the siblings if all countries were brothers and sisters. This was The Atlantis Report. Please Like. Share. And Subscribe. Thank You.

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