France's biggest problem is its banks. They have much lower private debts so as long as they do not bail out the banks they should recover sooner.

France's biggest problem is many years of bad economic policy leading to massive collapse of economic competitiveness.
http://finance.fortune.cnn.com/2013/01/ ... my-crisis/

Successive governments have commissioned a a series of reports into how they can regain that competitiveness (including the current one) with minimal disruption, and they have ignored them without exception. When the Germans and Scandinavians have had similar problems they have reformed and prospered. Italy, France, Spain etc have simply chosen to wait until forced, which dramatically inflates the costs and harm.

What's "funny" is that newspapers in the UK keep bleating about how bad France is performing when it is doing significantly better than the UK. By that I mean that it still exports its industry (EDF,orange, trains being some of them), people have access to decent healthcare, education and affordable accommodation and job security (Germany has a very high percentage of part timer and very low wage jobs.)

I'm not saying the French economy has nothing going for it. But the public sector sucks up a massive 57% of GDP which is entirely unsustainable; those exports are unprofitable (France has a horribly low level of corporate profits which means factories must close). Private sector investment is low partly because there are few profits to fund it and partly because the bloated public sector crowds out corporate borrowing.

They should have fixed these problems years ago - the private sector already stopped growing before the credit crunch because of it. Having failed to act, they still have time to put in place a sensible medium term strategy.

Or they can wait, and then blame Les Anglo Saxon financiers when their bonds spike and it becomes ruinously expensive to fix issues they have known about for almost a decade.

Their biggest issues is their out of date labour laws - they are similar to what we had in the 70's re unions etc. This is why lots of smaller French companies do not hire on new workers as its almost impossible to get rid of them later on

* taking a external point of view for the purpose of discussion*

Let's say they relax the laws. People will hire more, However they will also expect overtime for free and exploit the staff to the bone because they know that it's work or the door.
Wonderful improvement for everyone isn't it?

Happy to play your devils advocate card
I see no relationship between hiring more staff and asking them to do overtime for no pay. When I hire extra staff I will have a contract of employment and the staff can decide if they want to join the firm

- If as a business I get a good order and am feeling a bit opportunistic I might then think of hiring a few extra staff. However I know that if I hire you I cannot get rid of you so I will either not take the extra order or ask my exsiting staff to do overtime
However
If I know that I can if needed fire you later I will then hire the staff - hoping that I get more orders and so can keep you on

There are certainly benefits of more flexible employment laws but the corollary to that should be a decent safety net in terms of unemployment benefits. Businesses have definitely benefited from flexible staff in the UK but the levels of unemployment have also moderated pay for the majority of staff with median wages stagnant in real terms since 2003. If you then eliminate the safety net, then unemployment becomes very harsh. Look at many countries where benefits are limited to two years, when they have had recessions for six years. It hollows out the economy.


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