France: Let us not forget 1981

Ending the crisis in France will require an increase in wages , in public spending ( development of public services in rural areas, increase in the activity bonus) and in pensions, and also tax cuts . This type of economic policy experiment was tried already in 1981, with an increase in the minimum wage and the hourly wage, in pensions and in public spending, and a large fiscal deficit. This experiment had very negative consequences: Falling profits and investment; Deteriorating competitiveness and foreign trade, requiring numerous de valuations and wage restraint at a later stage; Rising interest rates due to the fiscal deficit and the external deficit; Loss of growth; Sharply rising unemployment. The consequences of this experiment in 1981 should normally discourage politicians from repeating it.