The journalists’ visit to the Paris-based headquarters of French automaker Renault kicked off in a very French way: with an almost two-hour lunch. It was naturally not a simple affair in the company cafeteria. The meal at the nearby Cap Sequin restaurant boasted three artery-clogging courses, a bottle of white wine and a wonderful view of the Seine River followed by coffee and chocolates. At about half past two, it was finally time to get back to work, though it was somehow difficult to do so.
For decades, France’s economy has violated established laws of economics and not just because of the cholesterol-packed lunches. There’s also the fact that France is the world leader in terms of vacation days, has a nationwide 35-hour work week and allows its citizens to retire at 65, two years earlier than in Germany. On top of that, France has strict regulations regarding employee termination and a swollen public sector. Nearly 57 percent of France’s economic performance flows through state hands. That figure is about 10 percent higher than in Germany and a record level among industrialized nations.
Now France has elected François Hollande, a Socialist president whose most important pledge was “More of the same!” He has called for public-sector jobs financed with a 75 percent tax on top earners, and more time to enjoy retirement. Indeed, while Germany just boosted its retirement age to 67, its western neighbors might soon be able to leave the working world at 60 with a full pension.
Given these facts, it should come as no surprise that France is struggling with a few economic problems: major budget shortfalls, persistently low economic growth and a high youth-unemployment rate. Even more astounding, however, is just how good the French are doing despite their idiosyncratic economic model. Admittedly, per capita economic performance is 8 percent lower in France than Germany, after adjusting for differences in purchasing power. But considering that the French have been the world champions of savoir vivre for decades, while the Germans have been self-denying work horses, that 8 percent difference doesn’t really seem so big.
In other words, a country that according to established economic laws should be playing in the same league as Greece has defied the odds to keep pace with Germany. How did this happen?
Read more at Der Speigel