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Why France is depressed and how it can reform

This fantastic, rather long article by The Economist (April 20, 2011 print edition),“Reforming Gloomy France”, profiles the country’s current pessimistic mood, economy, prospects for growth and entrepreneurial start-up spirit that is motiving many today. It speaks about how the French state of mind is hard to pinpoint and also hope for the future. Excellent read. These are only excerpts below. You can read the full article at the link above, and I’ve made it available for download.

France
Reforming gloomy France
The French are feeling morose about their future. The thrusting energy of their digital entrepreneurs suggests they should not
Apr 20th 2011 | PARIS | from the print edition

BEHIND the bustling terrace cafés and bright municipal blooms of springtime, France today is not a happy place. Tense, fearful and beset by self-doubt, the French seem in a state of defiant hostility: towards their president, political parties, Islam, immigrants, the euro, globalisation, business bosses and more. Such is France’s despondency that its people face “burnout”, said the national ombudsman recently; previously, he had described the nation as “psychologically exhausted”.

It is a sign of French disgruntlement that the publishing sensation of the past six months has been “Indignez-vous!” (“Time for Outrage!”), a pamphlet by a 93-year-old urging his fellow countrymen to revolt. Indeed, the French currently rank among the world’s most pessimistic. Only 15% told a global poll that they expect things to get better in 2011, a far smaller percentage than of Germans or even Afghans and Iraqis (see chart 1)…

…The French seem simply to doubt their politicians’ ability to do much to improve anything. The economy is emerging only slowly from the recession, with GDP growth this year forecast to reach 1.7%, compared with 2.5% in Germany. Joblessness, at 9.6%, is high, and even more so for the under-25s. Although the government has embarked on fiscal consolidation, public finances remain under strain, with a deficit of 7.7% last year. Ordinary working people keep hearing that their high-tax, high-spending model provides them with one of the world’s most generous social systems; yet even the middle class feels a squeeze at the end of each month.

The upshot is a fatalistic France that seems to have set its sights on little better than controlled decline: a middling economic power, whose people cling to their social model and curse globalisation, while failing to get to grips with either. Considering what they hear from politicians, this attitude is perhaps not surprising. The Socialist Party promises, with a straight face, to restore retirement at 60 (the age was recently raised to 62) and urges greater European protectionism as a response to globalisation. Ms Le Pen vows to withdraw France from the euro and put back border controls. Mr Sarkozy’s political day-trip of choice is to a metal-bashing factory—although only 13% of jobs are in industry—where he surrounds himself with workers in overalls and hard hats, telling them they need to be protected from globalisation and other ills.

One conclusion from all this is that France and its politicians are irredeemably conservative. Indeed, France often seems to be in semi-permanent revolt, arms crossed and heels dug in against change. Only last autumn, unions and oil workers led weeks of strikes and blockades in protest at Mr Sarkozy’s modest raising of the minimum retirement age. On a single day, up to 3.5m protesters took to the streets; petrol pumps ran dry across the country. “Why France is impossible to reform”, lamented L’Express, a news-magazine….

…But if the French really are so allergic to change, how come the pension reform not only went through but has now been accepted, even forgotten? Only weeks after the new law reached the statute books in November, the matter did not rank among the nation’s top ten subjects of conversation, according to a poll for Paris-Match. France seemed to go through a painful spasm of rebellion, then to shrug it all off and resume business as usual. “We were able to demonstrate to the French people that there are things that a government just has to do,” argues Christine Lagarde, France’s finance minister. “For once, the government did not give in to the street.”…

…By holding firm, and ignoring charges of political deafness, Mr Sarkozy appealed over the heads of those on the streets to the silent majority. He took a bet that this invisible France would quietly back change, and prevail over the rest. For, in reality, two halves of the country co-exist. One half, mostly, but not only, in the public-sector, is led by hard-talking trade unionists promising to prolong benefits for privileged “insiders” and entrench rigid labour laws. The other half, mostly found in the more dynamic, private sector, is plugged into global markets and just as despairing of its strike-happy fellow countrymen as anybody else.

This is the France that does not go on strike, that defies disruptions to struggle into work, and whose voice is seldom heard. It is found among the 92% of workers who do not belong to a union. It is the small traders and artisans who are up before dawn scrubbing their shop-front windows. It is the workforce whose productivity per hour worked is higher than that in Germany and Britain, and which helped to make France the world’s third highest destination for foreign direct investment in 2010. It is the third of private-sector employees who work for a foreign firm. It is France’s leading global companies—Vivendi, L’Oréal, Michelin, LVMH—which busily reap the benefits of globalisation, a force that the French say they deplore.

This voiceless France, more adaptable and forward-looking, seldom permeates the national conversation. Yet a glance at the France behind the headlines hints at a picture that is a lot less glum. Shops are full, markets busy and consumer spending is buoyant. Property prices are up. The French have snapped up the iPad and 20m, or nearly a third of the population, are on Facebook. The French may moan about their country, their bureaucrats and their politicians, but they seem happy with their individual situation. Though only 17% of young people told one recent poll that their country’s future was promising, a massive 83% said that they were satisfied with their own lives.

  1. April 25th, 2011 at 02:42 | #1

    Why are so many dumping on the French as being pessimistic?

    Recent study indicate that American pessimism is higher that it’s been in decades.

    Suspect that pessimism is at a high currently that is why the price of gold is at current record highs.

    Olga Kovshanova, MBA, MA
    Sales and Guest Relations Manager for CIS
    The Grand Mauritian Resort & Spa
    Hotel Professional Extraordinaire
    Email: olinka@olinka.info
    Homepage: http://www.olinka.info/
    Skype name: olinkaru
    ICQ: 212336628
    M: +230-717-5790
    LinkedIn profile: http://www.linkedin.com/in/kovshanovaolga

    • April 25th, 2011 at 16:46 | #2

      You’re right that pessimism is higher in America than in recent years, but France has traditionally been a place where pessimism is quite prevalent. It’s not an opinion, just a fact (look at the poll in the article). You know it’s bad when a lesser proportion of French people think 2011 is going to be a better year than 2010, than the percentage of Afghans and Iraqis. Yet France is a paradox as well, as the pessimism seems to be more about the future rather than the present (again in article) and also there is an increasing number of entrepreneurs who have traveled and are more open in their perspectives. So let’s hope the pessimism dissipates in the coming few years.

  2. April 25th, 2011 at 18:36 | #3

    Will see for my Self if the claimed “pessimism” is greater than when I lived in France 9/05-09/08 when will be in Paris 14-19/06.

    Will be in The BIG Apple the week before so will have a comparison.

    In general most love to bitch so have to discount most of the complaints as just excuses to not care for Number ONE!

    Hoping to have the honor of meeting you tête-à-tête ?

    EnJoY a GRAND day 🙂 !

    Olga

    ———————————

    Olga Kovshanova, MBA, MA
    Sales and Guest Relations Manager for CIS
    The Grand Mauritian Resort & Spa
    Hotel Professional Extraordinaire
    Email: olinka@olinka.info
    Homepage: http://www.olinka.info/
    Skype name: olinkaru
    ICQ: 212336628
    M: +230-717-5790
    LinkedIn profile: http://www.linkedin.com/in/kovshanovaolga

  1. April 29th, 2011 at 12:53 | #1

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