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ANALYSIS: Why it might be time to thank the Gilets Jaunes for France’s strong economy

Economic growth in France is now stronger than Germany and - ironically - it might be thanks to the Gilets Jaunes, writes John Lichfield.

ANALYSIS: Why it might be time to thank the Gilets Jaunes for France's strong economy
The Gilets Jaunes caused plenty of damage, but may have inadvertently strengthened the French economy. Photo: AFP

Forget the doom-mongers and nay-sayers (as Boris Johnson might say). France is booming.

OK. D’accord. France is not precisely booming. Some parts of France and some French people are still struggling.

All the same, the growth figures for the third quarter released on October 30th exceeded expectations at 0.3 percent. Annual growth is now likely to be 1.4 or 1.5 percent, a little down on 2018 but well above Germany which may have tipped into a recession (after two quarters of economic decline.)

READ ALSO France's unemployment rate falls to new 10-year low

Unemployment is at its lowest level for a decade. Photo: AFP

French unemployment is now the lowest in a decade at 8.2 percent and still falling. Jobs are being created in large numbers. Many of them are “real jobs” – in other words permanent contracts or contrats à durée indéterminée (CDI), not temporary jobs or state-subsidised jobs.

Who deserves the credit for this comparative French boom?

Emmanuel Macron and the Gilets Jaunes.

France is doing better than Germany partly because the French are spending more money on everything from food to cars. Why is domestic consumption rising? Partly because President Macron – against his original instincts and intentions –  injected over €10 billion in tax and other concessions for low and medium earners directly into the economic bloodstream last winter and spring.

Why did he do that? To quell the original Gilets Jaunes rebellion which started almost exactly one year ago.

Say “merci” to the Gilets Jaunes, Monsieur Macron.  Actually, he already did – sort of.

The French economy is also humming because internal investment is strong. Why? Because business is confident that Macron's labour and other reforms are taking the country in right direction.

The leap in job creation is linked partly to Macron’s changes in French labour law, which started under President François Hollande (at Macron’s urging).

Employers are more willing to offer full-time jobs because it is easier for them to end contracts if necessary.

This is not the narrative of Macron-imposed woe told by the original, provincial yellow vests, whose numbers have greatly declined since March. It jars with the dark portrait of a “suffering” or “oppressed” France still painted each Saturday by the persisting, hard-left-oriented Gilets Jaune and their foreign fans of hard left and hard right.

Say “merci” to nice President Macron, Gilets Jaunes. Not much chance of that.

READ ALSO ANALYSIS Why pension reform in France always spells trouble

Macron spent some time listening to the concerns raised by protesters and local mayors after the Gilets Jaunes protests. Photo: AFP

The relative French boom is, admittedly, patchy. There are even patches within the patches.

Unemployment among the young (25 or less) remains stubbornly high. Not all regions are doing well even if some areas which have suffered economically for decades are beginning to recover.

As a senior minister ruefully admitted last week, the jobs bonanza is mostly concentrated in the thriving metropolitan areas. It has not yet reached the peripheral, small town or hard-scrabble, outer-suburban France where the original Gilet Jaune rebellion began in October-November last year.

There are, however, exceptions to this exception. The north of France – the long-depressed, ex-mining and industrial area around Lille and Calais – is creating jobs more rapidly than the country as a whole. Unemployment in the Nord and Pas de Calais départements has fallen by over 5 percent in a year – more than double the rate nationwide. It still remains miserably high, at over 10 percent.

Interestingly, many of the new jobs in the north – in services, transport and construction – are going to people in their 50s  who have been unemployed for many years.

Several factors explain the relative health of the French economy as a whole. France is strong in financial and other services which have been less affected by the global trade recession than physical goods (which accounts for Germany’s troubles).

The French official statistics office INSEE links the better than expected performance in the third quarter (July-September) to a 0.3 per cent jump in household spending. This in turn, says INSEE, is explained by the extra purchasing power generated by Macron’s concessions to the Gilets Jaunes, including tax cuts for the lower paid and a state-subsidised bonus for many people on the SMIC (minimum wage).

French employment minister Muriel Pénicaud. Photo: AFP

This may be a temporary boost. The effects of Macron’s changes in French labour law and other reforms should be  permanent. The OECD now says that Macron’s target of 7 per cent unemployment by the end of his mandate in 2022 is “not impossible”.

Macron reforms have made long-term contracts more attractive to employers by, inter alia, limiting the cost of early or unfair dismissal. They also made short-term contracts more costly to bosses and changed tax and benefit rules to make low-paid work more attractive than welfare.

France, according to the OECD, now has less rigid labour laws than Germany. The employment minister, Muriel Pénicaud told the Financial Times this week: “Many jobs, particularly permanent ones, have been created because companies, especially small ones, are no longer afraid to hire”.

Several problems remain. Over 2,400,000 people are still out of work. There are 400,000 vacant jobs because unemployed people do not always have the right skills or because benefits can still be more attractive.

The North apart, most new jobs are being created in the booming Metropolitan areas such as of Paris, Toulouse, Grenoble, Bordeaux and Montpellier.  Well-paid jobs remain scarce in the hundreds of declining rural towns where the Gilets Jaunes revolt began. That is a problem which needs to be addressed, urgently.

All the same, this week’s figures provide a welcome antidote to nonsense about a “suffering” France beset by weekly riots which is still systematically spread online.

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OPINION: France’s ‘slow train’ revolution may just be the future for travel

Famous for its high-speed TGV trains, France is now seeing the launch of a new rail revolution - slow trains. John Lichfield looks at the ambitious plan to reconnect some of France's forgotten areas through a rail co-operative and a new philosophy of rail travel.

OPINION: France's 'slow train' revolution may just be the future for travel
The slow trains would better connect rural France. Photo: Eric Cabanis/AFP

France, the home of the Very Fast Train, is about to rediscover the Slow Train.

From the end of this year, a new railway company, actually a cooperative, will offer affordable, long-distance travel between provincial towns and cities. The new trains – Trains à Grande Lenteur (TGL)?– will wander for hours along unused, or under-used, secondary lines.

The first service will be from Bordeaux to Lyon, zig-zagging across the broad waist of France through Libourne, Périgueux, Limoges, Guéret, Montluçon and Roanne. Journey time: seven hours and 30 minutes.

Other itineraries will eventually include: Caen to Toulouse, via Limoges in nine hours and 43 minutes and Le Croisic, in Brittany, to Basel in Switzerland, with 25 intermediate stops  in 11 hours and 13 minutes.

To a railway lover like me such meandering journeys through La France Profonde sound marvellous. Can they possibly be a commercial proposition?

Some of the services, like Bordeaux-Lyon, were abandoned by the state railway company, the SNCF, several years ago. Others will be unbroken train journeys avoiding Paris which have never existed before – not even at the height of French railway boom at the end of the 19th century.

The venture has been made possible by the EU-inspired scrapping of SNCF’s monopoly on French rail passenger services. The Italian rail company Trenitalia is already competing on the high-speed TGV line between Lyon and Paris.

The low-speed trains also grow from an initiative by President Emmanuel Macron and his government to rescue some of France’s under-used, 19th century, local railways – a reversal of the policy adopted in Britain under Dr Richard Beeching from 1963.

The cross-country, slow train idea was formally approved by the rail regulator before Christmas. It has been developed by French public interest company called Railcoop (pronounced Rye-cope), which has already started its own freight service in south west France.

Ticket prices are still being calculated but they are forecast to be similar to the cost of “ride-sharing” on apps like BlaBla Car.

A little research shows that a Caen-Toulouse ticket might therefore be circa €30 for an almost ten-hour journey. SNCF currently demands between €50 and €90 for a seven-and-a-half-hour trip, including crossing Paris by Metro between Gares Saint Lazare and Montparnasse.

Maybe Railcoop is onto something after all.

The company/cooperative has over 11,000 members or “share-holders”, ranging from local authorities, businesses, pressure groups, railwaymen and women to future passengers. The minimum contribution for an individual is  €100.

The plan is to reconnect towns ignored, or poorly served, by the Train à Grande Vitesse (TGV) high speed train revolution in France of the last 40 years. Parts of the Bordeaux-Lyon route are already covered by local passenger trains; other parts are now freight only.

In the longer term, Railcoop foresees long-distance night trains; local trains on abandoned routes; and more freight trains.  It promises “new technological” solutions, such as “clean” hydrogen-powered trains.

MAP France’s planned new night trains

For the time being it plans to lease and rebuild eight three carriage, diesel trains which have been made redundant in the Auvergne-Rhône-Alpes region.

There will be no space for a buffet or restaurant car. Restaurants and shops along the route will be invited to prepare local specialities which will be sold during station stops and eaten on board.

What a wonderful idea: French provincial meals on wheels; traiteurs on trains.

Olivia Wolanin of Railcoop told me: “We want to be part of the transition to a greener future, which is inevitably going to mean more train travel.

“We also want to offer journeys at a reasonable price to people who live in or want to visit parts of France where train services have all but vanished. We see ourselves as a service for people who have no cars – but also for people who DO have cars.”

Full disclosure. I am a fan of railways. I spent much of my childhood at Crewe station in Cheshire closely observing trains.

Three years ago I wrote a column for The Local on the dilemma facing SNCF and the French government on the 9,000 kilometres of underused and under-maintained local railway lines in France. Something like half had been reduced to low speeds because the track was so unreliable. Several dozen lines had been “suspended” but not yet officially axed.

The government commissioned senior civil servant, and rail-lover, François Philizot to study the problem. After many delays, he reported that much of the French rail network was in a state of “collapse”. Far from turning out to be a French Beeching, he recommended that a few lines might have to close but most could and should be saved – either by national government or by regional governments.

Since then the Emmanuel Macron-Jean Castex government has promised a big new chunk of spending on “small lines” as part of its €100 billion three year Covid-recovery plan. Even more spending is needed but, for the first time since the TGV revolution began in 1981, big sums are to be spent on old lines in France as well as new ones.

The Railcoop cross-country network, to be completed by 2024-5, will run (at an average of 90 kph) partly on those tracks. Can it succeed where a similar German scheme  failed?

François Philizot suggested in a recent interview with Le Monde that a revival of slow trains might work – so long as we accept that a greener future will also be a less frenetic future.

“When you’re not shooting across the country like an arrow at 300 kph, you can see much more and you can think for much longer,” Philizot said.

Amen to that.