Monsieur Hollande hasn’t exactly set France alight so far and his promise to lower unemployment in 2013 couldn’t have gone against him any worse than it did. Polls have him as one of the least popular French presidents in recent times.
In his new years speech he said he would cut companies labour costs in exchange for companies to hire more people. The move has been welcomed tepidly by businesses as they agree that labour cost are higher in France than other countries. Unions and left wing allies haven’t been so enthused and have reservations over the ideas.
For the last few years France has been flying mostly under the radar, although they face massive internal problems and have been for quite a while. They are facing the prospect of falling back into recession this year having seen Q3 GDP fall back to 0.2% from 0.5% in Q2. As we saw today their services PMi is still in contraction and falling inflation could still pose a big risk.
While most eyes are still on Spain, Italy and Greece maybe we should keep a closer tab on France for the foreseeable future.
