• France's news in English
 

'Recession exit could be bad news for France'

Published: 14 Aug 2013 18:02 GMT+02:00

“Better days are unquestionably ahead of us,” said France’s Budget Minister Bernard Cazeneuve on Wednesday.

The minister's upbeat statement was in reaction to the news that France was officially no longer in recession after its economy enjoyed surprise growth of 0.5 percent last quarter.

Cazeneuve’s words reflected a feeling of relief among the Socialist French government, who had endured months of flak as the economy ground to a halt and eventually dipped into recession.

While Prime Minister Jean-Marc Ayrault was not exactly jumping for joy, he echoed his minister's positive mood saying “this shows that we're on the right path."

However, analysts disagreed, with Christian Schulz, an economist from Berenberg Bank, telling The Local the figures could even make matters worse for France.

“The impact of these figures could in fact be damaging because they could lessen the pressure on the French government to carry out the necessary reforms.

“This surprise growth could actually make them blind to all the other problems. It’s quite likely France will return to the stagnation we have seen over the last year and half.

Schulz believes growth of 0.5 percent does not mean France’s economy has turned the corner.

For the economist, France’s politicians should only start believing they “are on the right path” once real reforms have been implemented.

“The key is the labour market. France needs to bring down its deficit but its priority is to liberalise the labour market.

“They need to follow the German experience. Since Germany made its labour market more flexible, they have had more people in work and therefore more paying taxes and paying into the social security system. If France can do the same then the fiscal problems will be resolved as a bi-product.

“France has taken modest steps in the right direction, you can’t deny that, but that comes after they took big steps in the wrong direction. There is clearly a lot more to be done.

“After the summer we expect the French government to come up with some widespread, if difficult, reforms.”

Eric Heyer, an economist from the Paris-based French Economic Observatory agrees that the government has no reason to celebrate Wednesday’s figures.

“This growth was based on an increase in consumption, which does not mean there will be sustainable growth,” he told The Local.

“It was a cold winter which meant households consumed a lot of energy, which was the cause of this economic growth.”

“The data showed that 27, 800 commercial jobs were lost in the second quarter. Until investment increases and companies start creating jobs in France, we cannot say the economy is really heading in the right direction.”

French president François Hollande has vowed to stem the rise in joblessness by the end of 2013, something Heyer believes is unlikely.

“It will be very difficult for France to create any jobs in its public sector this year," he said. "It's possible Hollande can achieve his target, but not probable."

Ben McPartland (ben.mcpartland@thelocal.com)

Your comments about this article

Today's headlines
Google defies France on 'right to be forgotten'
Google rejected a French bid for a global right to be forgotten. Photo: AFP

Google defies France on 'right to be forgotten'

Google on Thursday rejected a French demand to globally apply the so-called right to be forgotten, which requires the company to remove links to certain information about users if asked. READ  

Extra French police help curb Calais migrant flow
French gendarmes attempt to block a migrant after he entered the Eurotunnel site. Photo: AFP

Extra French police help curb Calais migrant flow

A newly enforced police unit in northern France blocked at least 200 people from reaching the Channel Tunnel on Thursday night, as the British government prepares for an emergency meeting on Friday to grapple with the crisis. READ  

Réunion's plane debris to be probed in France
Policeman and gendarmes with the piece of unidentified aircraft found in the coastal area of Saint-Andre de la Reunion. Photo: AFP

Réunion's plane debris to be probed in France

UPDATED: Plane wreckage that washed up on a tiny Indian Ocean island will be sent to France for investigation, as hopes mounted Thursday the mysterious object could unlock the riddle of missing flight MH370. READ  

Migrant dies in botched Eurotunnel crossing
Ten migrants have died at the Calais post in the past two months. Photo: AFP

Migrant dies in botched Eurotunnel crossing

French authorities said on Thursday that a migrant had died from head injuries suffered in a weekend attempt to cross the Channel into England, bringing the number of such deaths to ten since June. READ  

France's Réunion braces for volcano eruption
‘The Peak of the Furnace’ has been spewing out more gases than usual. Photo: Richard Bouhet /AFP

France's Réunion braces for volcano eruption

Le Piton de la Fournaise, one of the most active volcanoes in the world and a main tourist attraction on the Réunion island, was evacuated Thursday as authorities warned of an imminent eruption. READ  

Ten things you didn't know about gay Paris
Do you know where to find penis-shaped bakery goods in Paris? Photo: Legay Choc/Facebook

Ten things you didn't know about gay Paris

There's a lot more to the gay scene in Paris than just the Marais - so we asked the experts at The Gay Locals to come up with a list of ten things you probably didn't know about Gay Paris. READ  

French mayor 'to force artists to mind kids'
The National Front mayor in Fréjus doesn’t feel the town hasn’t received enough in return from the artists. Photo: Kenzo Tribouillard/ AFP

French mayor 'to force artists to mind kids'

A far-right mayor in the southern town of Fréjus is allegedly considering making a group of local artists mind children in exchange for the rent subsidies they receive. READ  

British press bashes France over Calais crisis
The British press is blaming France for the situation in Calais. Photo: Philippe Huguen/ AFP

British press bashes France over Calais crisis

British tabloids combined two of their favourite themes in covering the Calais migrants controversy Thursday -- French bashing and railing against the government response to illegal immigration. READ  

French nuclear giant Areva to sell unit to EDF
The headquarters of the French nuclear group Areva in La Defense near ParisPhoto: AFP

French nuclear giant Areva to sell unit to EDF

Atomic energy giant Areva on Thursday agreed to sell a majority stake of its nuclear reactor unit to electricity group EDF as part of an awaited reconfiguration of the French sector. READ  

Ex-Sarkozy advisor charged in fraud probe
French former President Nicolas Sarkozy and Patrick Buisson. Photo: AFP

Ex-Sarkozy advisor charged in fraud probe

A one-time advisor to former French president Nicolas Sarkozy was charged on Wednesday with abusing his position to profit from state funds, as part of an inquiry into alleged fraud in awarding contracts to opinion polling companies. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Features
Learn more about the Bayonne festival - France's wildest party
Features
What's on in France: Ten things to do in August
Features
What to see and do at the Paris Plages this summer
Saudi royals 'bar' French policewomen from beach
Take a closer look at the 560,000-year-old tooth found in France
National
Swiss army pilfers French water to give to thirsty cows
National
'B**ch' and 'brainless': French shop slurs clients
Travel
French cops rebel over order to give kids sweets
National
New measures to stop migrant deaths in Calais
Travel
Here are some of the most ridiculous comments you'll read about France
Features
Life may be about to get easier for expats settling in France
National
Burning tyres and blocking roads is just the way the French do strikes
National
Muslim tourists visiting French Alps are reminded of burqa ban
Opinion
Slim and chic: Are French women fed up of the stereotypes?
French officials defend handing public beach over to Saudi royals
Society
French kiss: Should expats in France do 'la bise' among themselves?
National
Paris commuters and tourists face summer of travel trouble
This man learnt the entire French vocabulary in nine weeks, but why?
French speed cameras snare tens of thousands of British drivers
Gallery
What kind of expat in France are you: A lover or a loather?
Society
French tweeters reveal the trials and tribulations of #GrowingupFrench
Where to find the best (and worst) quality of life in France
National
Riviera rumpus as Saudi royals grab public beach all for themselves
What we know about France's foiled terror plot
Features
Here are ten places in Paris where you can escape the summer heat
National
Coup d'état fails in France after being snubbed by military
Are shoppers in northern France the most honest in the world?
French woman fined €90 for driving in flip-flops
Cyclists in Paris get the green light to jump red
'Adieu France': Angry mum's parting rant goes viral
Franco-German rift opens over Greece and it could take time to heal
The Megavalanche: The most spectacular cycling event in France
Ex-French PM's daughter creates a buzz by going topless for photo shoot
Could Parisians be bathing in the Seine by 2024?
Paris unveils new mobile app to help non-French speakers
France declares war on public transport sex pests
So where's the best place to live in France if you want to be happy?
Opinion
Paris: The City of Light, Romance, Style and the worst loos in Europe?
National
Eight ways living in France will change your lifestyle for good
International
Why French are more sympathetic to Greece than the Germans
Ten ideas that could improve the quality of life in Paris
National
Rules for taking selfies at the Eiffel Tower: No.1 Keep your clothes on
National
Paris's trendy Canal Saint-Martin is now more tip than hip
Latest news from The Local in Austria

More news from Austria at thelocal.at

Latest news from The Local in Switzerland

More news from Switzerland at thelocal.ch

Latest news from The Local in Germany

More news from Germany at thelocal.de

Latest news from The Local in Denmark

More news from Denmark at thelocal.dk

Latest news from The Local in Spain

More news from Spain at thelocal.es

Latest news from The Local in Italy

More news from Italy at thelocal.it

Latest news from The Local in Norway

More news from Norway at thelocal.no

Latest news from The Local in Sweden

More news from Sweden at thelocal.se

3,613
jobs available