France could do much worse

French growth is modest but remains decent. It has to be recognised that it could be much weaker in the absence of a number of’ "anomalies", potentially dangerous mechanisms: If the very low interest rates did not allow for the expansionary fiscal policy and also the increase in French companies’ debt that enables them to maintain high investment despite their low profitability; If credit did not increase so fast, thanks to low interest rates and default rates; If the oil price had not fallen; If wages did not increase at an abnormally high rate given the productivity gains, which later will create a profitability and competitiveness problem. The long-term effects of the increase in debt and the real wage increases that outpace productivity remain to be seen.