If our country continues with its economic and social model based on wealth distribution and indebtedness, we are headed for an irreversible downfall.
Where is France headed? This question was largely avoided by Emmanuel Macron in the interview broadcast by TF1 and LCI. He preferred to try and answer the question “Who am I?” in order to dissipate the negative aspect of his relationship with French people that hangs over him. And yet, the question ought to be at the very heart of the presidential debate, in a country facing a turning point in its history, teetering between recovery and collapse.
First and foremost, what is France’s situation at present? The assumption that France would be stronger in 2021 than in 2017 no longer holds water. In fact, it would be most surprising if it were. When François Hollande left office, France had been torn apart and bled dry, which was the reason why Emmanuel Macron was elected. The current presidency, now nearing its end, has been marked by two major crises: the national “gilets jaunes” [yellow vests] movement and the international Covid epidemic. Only a miracle could have brought us out of these two crisis with renewed strength. But there has been no miracle.
The strong upturn in 2021, with a 6.7% growth rate, the creation of 500,000 jobs and unemployment remaining stable at 8% of the working population might give the illusion that France’s economy is recovering. But, in fact, this is all due to reducing the unprecedented 8% fall in GDP in 2020 caused by the fact that certain businesses were officially obliged to shut up shop.
The main successes of Emmanuel Macron’s presidency have been the reduction of unemployment from 9.5% to 8% (with a million job vacancies), the 1.6% annual rise in purchasing power, the number of businesses that have been created, and the rise of French Tech, which will have raised almost €10 billion in 2021.
But the overall result is still mediocre. The average annual growth rate is 0.7% and inflation is returning over the long term, reaching 2.8% in 2021 and crushing purchasing power. The income gap has remained the same and has been accompanied by a high increase in inequality with regard to status and inherited wealth.
Above all, France has come adrift at an ever-increasing speed. The external deficit has soared to €86 billion in 2021 and will reach €95 billion in 2022, i.e. 3.7% of GDP, as the result of a fall in France’s share of the world market – down by 3% to 2.5%. Public debt has exploded, bringing debt from 98% up to 116% of GDP since 2017, and “no matter what the cost” excessive expenditure – will continue to pursue its irresponsible path in 2022 for electoral reasons, providing anti-inflationary indemnities, compensation for the rising costs of electricity and raw materials, and state-guaranteed loans.
From a production standpoint, industry and research has degenerated, as was clearly shown by the failure of the health sector to come up with an anti-Covid vaccine, even though Messenger RNA was discovered by the Institut Pasteur in the early 1960s. Even dependency on foreign foods has increased, with more than 20% of our foods being imported.
At the same time, public services in the health, education, safety and judicial sectors are crumbling. They are having to cope with a brain drain (of talent and skills) even though they have been given greater resources. Hospitals are the perfect example: between 5% and 20% fewer beds were available when we were in the full throes of the epidemic because 5% of jobs remained vacant and there was a 10% absenteeism rate. And yet, €14 billion was being invested in pay, and €19 billion in equipment.
Standards have continued to fall in the education system, as noted by the Pisa ranking, particularly in the sciences. This is only logical because, although primary school students have been able to repeat classes in deprived areas, there has been a catastrophic reform of secondary education, leading more than 50% of high school students to give up all science subjects three years before the baccalaureate, and has meant that the number of hours devoted to the teaching of maths has fallen by 18% in the two final years of high school. This is a major problem for any future growth in productivity; one out of two jobs today is being done by someone who has insufficient qualifications.
There is a simple conclusion to be drawn. Instead of revolutionizing the French model of growth based on borrowed money, Emmanuel Macron has pushed the model to its furthest limits.
Our country has lost its sovereignty, i.e. control of its own destiny, for it depends on China for supplies of essential goods, on the USA for technology, and on Germany for underwriting its debts. Without the euro, our double deficit – external and public – would already have driven us, as it did in 1982, to the gates of the IMF.
The deepening of the economic and financial crisis can be seen in the rise of widespread violence affecting all sectors of the population and all parts of the country. Buying internal peace by transfer spending to the tune of 34% of GDP doesn’t work any more. This is why our democracy is in such a critical situation, threatened by the explosion of identity-linked concerns, whether they be nationalistic (with estimates giving the far right 35% of the votes in the presidential elections) or racist (with the far left at 15%).
So where is France headed? If our country continues with its economic and social model based on wealth distribution and indebtedness, we are headed for an irreversible downfall.
From an economic standpoint, it will no longer figure among the top ten world powers in 2030. From a financial standpoint, it won’t be able to escape a major crisis in this decade when interest rates – which have begun to rise in the USA and the UK – overtake nominal growth.
There is nothing inevitable about this. It is an extreme paradox for France to be in decline when it has enough assets to bring it success in the 21st century: entrepreneurs, brains, excellence in certain public and private sectors, French Tech, savings, nuclear energy, culture and civilization. But these assets are being wiped out by political rabble-rousing, by dysfunctional, ineffective government, and by too much government, all of which have refused to adapt to big changes in the world: globalization, the return of China to the world stage in international exchanges, the single European market, the changeover to the euro, and the digital revolution.
Just as it did in 1945, France must rebuild, using an original model suited to the 21st century. And it must learn its lesson from the Covid crisis, which has shown that the only democracies able to face up to global risks of that nature are the ones with a strong, agile government, dynamic industry and research, an educated population trained in the use of information technology, good social cohesion, and in which people trust their institutions and leaders to a high degree.
We therefore have to conceive of a disruptive plan that prioritizes production, innovation, inclusion by means of education, modernization of the State, a new attitude to citizenship and the intransigent defense of Republican values. For this, we must not divide our energies but unite them. It is not the State but the French people that are the solution to the problems with our economic model, our nation and our democracy.
(Column published in Le Figaro, 20th December 2021)