In January, French President François Hollande warned that his country is facing an “economic and social emergency.” Earlier, Hollande declared that the country’s struggle with unemployment, which stands at over 10.5 percent, is as serious as its problems with terrorism. France has struggled to recover economically in the years following the 2008 financial crisis. Growth has been sluggish, with GDP rising by merely 0.2 percent in 2014 and 1.1 percent in 2015. For Hollande, who faces an election in 2017, unemployment and low growth are indeed a primary concern. These challenges, however, are a byproduct of the weaknesses of France’s economic model. Without further reforms, this model will limit France’s economic growth prospects. It will also contribute to the further erosion of Paris’ relationship with the German government and European Union. As Geopolitical Futures outlined last week, the French-German alliance is cracking as the countries’ economic models diverge.
The Pitfalls of the French Economic Model
Feb. 23, 2016 France’s economy has produced stagnant growth and high unemployment.