France: Calls for protection against globalisation are understandable but must not succeed

Globalisation has negative effects on the French economy via a number of its inherent mechanisms: Cost competition, given France’s high labour costs and low labour force skills; Tax competition, given France’s high corporate tax burden; The high required return on equity, which is a norm of globalised capitalism and which drives down wages. France could respond in two ways: Adapt to globalisation (wage moderation, corporate tax cuts, improvement in skills); Withdraw from globalisation. Europe withdrawing from globalisation is not a solution, as France’s problems (competitiveness shortfall, counterproductive taxation, low skills) are in relation to the other European countries in particular. So France cannot withdraw from globalisation, because it would then have to protect itself from competition from other European countries. It is therefore going to have to adapt.