France has considerable potential to put its economic situation back on a sound footing. There is no excuse for it falling behind the best-performing countries in Europe, apart from a collective failing on our part to muster our resources and talents. Why not take inspiration from countries that have thoroughly overhauled their economic model and are now top of the class?
To meet the challenges ahead, France has to transform its economic model by triggering the right drivers, such as structural reforms, European construction and investments for the future. Returning to buoyant, medium-term growth means catching up with Europe’s best-performing nations and will prepare France for future challenges. Inaction or passivity would, by contrast, incur risks for our economy. A scenario of weak growth and high unemployment, with all its drawbacks, cannot be ruled out.
Public debate and pedagogy will be vital in this major collective undertaking. With this initial contribution, the Medef encourages all economic stakeholders to join the discussion by offering their insights and solutions.
“This publication aims to drive a lasting debate on growth and gives free reign, on both sides, to twenty-four specialists and business leaders to collect their assessments and solutions to boost growth in France, challenge by challenge.”
Seneca once said, “If a man does not know what port he is steering for, no wind is favourable”. For the last five years, the Medef has been striving to build a shared economic vision through participatory groundwork. This resulted in the publication, in 2015, of our foresight study, “France 2020”. We then looked at reforms to be introduced in France to release the economic potential that we identified. So, in 2017, prior to the presidential and parliamentary elections, the Medef published a second volume entitled, “The world is changing, let’s change France!” This summarised our proposals for reforms based on four building blocks: education, social model, simplification and taxation.
Today, the direction seems clear, as do structural reforms, and we now need to take action to finally make our country grow, and by that, I mean return to a growth rate that is firmly rooted above 2 per cent. I am always struck when I hear politicians talk about growth. They seem to have discovered it and await it like people waited for rain in the Middle Ages. But, we seek out and generate growth in our businesses and I’m convinced the same goes for the country.
If we do nothing, France may very quickly return to a growth rate of around 1.3 per cent, perhaps less, and keep a persistently high unemployment rate. I believe that our country can do better, a lot better, if it takes the right decisions now.
But, I wanted to put this belief to the test. The Medef teams made a list of available studies and identified opportunities and risks in terms of growth, for each of France’s 7 challenges for 2020. This unprecedented piece of work was not based on a specific macroeconomic model, but rather on the summary of work from renowned institutes, expert opinions and economic institutions, in an over-arching approach.
What I take from this research is that France holds all the cards to succeed. By taking the right course of action, with courage and conviction, France could secure an average of 1.9 to 3.2 per cent growth in the medium-term and gear up to face the long-term with confidence. The growth potential is there, and we have the considerable ability to make up for lost time. France has lost almost 8 per cent of GDP per capita in ten years compared to its German neighbours. At the same time nearly 9 per cent of the active population is unemployed. France therefore has untapped resources and considerable room for improvement, so let’s use it! I also note that doing nothing has a cost. The 1.3 per cent potential growth flagged up by certain economists could well drop at 0.8 per cent or even 0.3 per cent, if we don’t collectively give ourselves the means to deal with the challenges ahead.
This publication aims to drive a lasting debate on growth and gives free reign, on both sides, to twenty-four specialists and business leaders to collect their assessments and solutions to boost growth in France, challenge by challenge. I encourage readers to look at these interviews, which provide tangible and effective ideas on solutions to be introduced and the way forward.
What I really want is that all those involved in economic matters, citizens, business leaders, students and apprentices, trade unionists, specialists, employees, journalists, politicians and public servants challenge this book by providing their ideas, analyses and solutions to fuel a far-reaching debate on growth.
To read the publication – The world is changing, let’s change France – click here