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Can the new French economic policy be successful?

Author

Listed:
  • Catherine Mathieu

    (OFCE (Observatoire français des conjonctures économiques))

  • Henri Sterdyniak

    (OFCE (Observatoire français des conjonctures économiques))

Abstract

In early 2013, the French economy, like many other EU economies, faces tough challenges. French GDP is 9 per cent below the level it would have reached had it continued to grow at its pre-crisis trend. France has committed to cut the public deficit to 3 per cent in 2013 and 0 per cent in 2017 which would imply dramatic public spending cuts and fiscal tightening, reducing GDP growth even further. France has to choose between strengthening its specificity, its social model and its State-interventionist tradition, and imitating the best pupils of globalization in the world or in Europe by implementing liberal or social-liberal strategies. The paper deals with the French government strategy since the 2012 presidential elections and tries to assess its chances of success. In many areas – fiscal strategy, social issues, banking and industrial policies – there is a significant risk that the announced proactive strategy will be replaced by policies accepting the constraints imposed by European institutions and financial markets.

Suggested Citation

  • Catherine Mathieu & Henri Sterdyniak, 2013. "Can the new French economic policy be successful?," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 10(2), pages 175-192.
  • Handle: RePEc:elg:ejeepi:v:10:y:2013:i:2:p175-192
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    References listed on IDEAS

    as
    1. Lars Calmfors & Simon Wren‐Lewis, 2011. "What should fiscal councils do?," Economic Policy, CEPR;CES;MSH, vol. 26(68), pages 649-695, October.
    2. Graham Bird & Alex Mandilaras, 2012. "Will Europe's Fiscal Compact Help Avoid Future Economic Crises?," School of Economics Discussion Papers 1212, School of Economics, University of Surrey.
    3. Catherine Mathieu & Henri Sterdyniak, 2011. "Finances publiques, sorties de crise..," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(1), pages 17-60.
    4. Guillaume Allègre & Marion Cochard & Mathieu Plane, 2012. "Quels effets du « contrat de génération » sur l'emploi et les finances publiques ?," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(8), pages 35-42.
    5. Francesca D'Auria & Cécile Denis & Karel Havik & Kieran Mc Morrow & Christophe Planas & Rafal Raciborski & Werner Roger & Alessandro Rossi, 2010. "The production function methodology for calculating potential growth rates and output gaps," European Economy - Economic Papers 2008 - 2015 420, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
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    7. Charles Wyplosz, 2011. "Fiscal Discipline: Rules Rather Than Institutions," National Institute Economic Review, National Institute of Economic and Social Research, vol. 217(1), pages 19-30, July.
    8. Pierre Cahuc & André Zylberberg, 2009. "Les réformes ratées du président Sarkozy," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00368321, HAL.
    9. Eisner, Robert, 1989. "Budget Deficits: Rhetoric and Reality," Journal of Economic Perspectives, American Economic Association, vol. 3(2), pages 73-93, Spring.
    10. Catherine Mathieu & Henri Sterdyniak, 2011. "Finances publiques, sorties de crise…," Sciences Po publications info:hdl:2441/5l6uh8ogmqi, Sciences Po.
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    More about this item

    Keywords

    French economic policy; fiscal compact;

    JEL classification:

    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
    • H60 - Public Economics - - National Budget, Deficit, and Debt - - - General

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