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Is France in any state to lead?

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Is France in any state to lead?


Next Thursday and Friday Europe holds a summit that we are once again obliged to qualify as crucial.
What is certain is that France’s position, and its new president François Hollande, are keenly anticipated.

Hollande comes to Brussels armed with a plan he says will reboot European growth.

Some are even seeing him as the saviour of the euro. France wants to impose its anti-crisis cure as it will also shelter it from the risks of contagion as, with a 5.2% budget deficit, it is far from being the eurozone’s star pupil.

Here is a snapshot of the current French economy. As well as this analysis Audrey Tilve, euronews’ Brussels correspondent, talks to Daniel Gros of the European CEPS thinktank.

Time for France to play catch up with Europe
France is a country envied for its lifestyle and food. It co-exists with its next door neighbours, the major powers of Western Europe.  
It is a modern, efficient, attractive, country with a highly qualified workforce and a solid infrastructure. It has all the potential to succeed, but it is being held back by more than a Gallic shrug.
Take the country’s lack of competitiveness. France’s economic output has declined figures show it now lags behind Great Britain and Germany. The country has seen the biggest drop in exports in the eurozone in 10 years.
When it comes to putting its hand into its collective pocket, France spends too much. The percentage of public spending is the highest in Europe, 54.36 percent of GDP for 2005 – 2010. 
In 2011 the public debt reached 85.8% of GDP, that is a record in France.
The debt has become a way of financing – the debt is threefold, between the state, regions and local governments - such as the social security deficit which could reach 14 billion this year.
De-industrialisation has been particularly dramatic in France. Since 2008, 280,000 jobs were lost that accounts for 9.5percent of the workforce.
As factories close the share of industry in the GDP fell by about one third. That is seen as unprecedented change, and is a handicap for the whole economy.
Finally, labour costs are too high in France and have risen rapidly, 19 percent in the last ten years.  
At that rate French costs are getting close to some of the countries which are in difficulty in the euro zone, Italy, Portugal and Spain.
The French population grew by 7.5 percent in 10 years. It is one of the most dynamic demographics of Europe.
French women have on average 2.01 children, which is more than their German neighbours at 1.39. But a growing population is an asset for growth provided the economy adapts.
The productivity level per hour is quite high in France, the third largest in Europe, behind Italy and ahead of Ireland and Germany.
That is a good statistic but not enough to offset the small amount of work per capita and the relatively high price.
Objectives for France: to restore the balance of public finances and take steps to strengthen its competitiveness while there needs to be a reform in the labour market.

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