Structural Problems and Creeping De-Industrialisation: Is France Europe’s New Problem Child?

Negative reports about France’s economy have been multiplying since last autumn. Guido Zimmermann, Landesbank Baden-Württemberg, Stuttgart, sees the main reason for the very sharp drop in France’s exports by international comparison as a structural break in its ability to produce internationally competitive goods. He also warns against industrial-policy activism, as this has not proven particularly successful in the past. The greater cause for concern is that Germany’s heavily export-dependent manufacturing sector will come under greater pressure in the future. Henrik Uterwedde, Deutsch-Französisches Institut, Ludwigsburg, points not only to the symptoms of the current crisis, such as weak growth, rising unemployment and longstanding external deficits, but also to a series of strengths and sources of potential, such as the high quality of France’s infrastructure or the widely-recognised high standards of social security. These factors give France the capabilities that could help it to overcome its problems. Daniela Schwarzer, Stiftung Wissenschaft und Politik, Berlin, emphasises that France must do a great deal in the years ahead to conserve its remaining industrial strength. Potential lies in traditionally strong sectors like pharmaceuticals, luxury goods, aerospace and nuclear energy.