France’s economic policy logic: Is there a plan B?

The logic underpinning France’s economic policy is quite clear: France’s main problem is its low employment rate (which explains its inequality before redistribution, its low potential GDP and its fiscal deficits); A comparison between OECD countries shows that an improvement in the employment rate requires an increase in labour force and youth skills and a reduction in corporate social contributions. The policies being carried out in France (reform of training, apprenticeships, education; reduction in corporate charges; probably also tax cuts to reduce companies’ cost of capital) therefore point in the right direction. If they succeed, they will self-amplify , as the increase in the employment rate will make it possible to reduce corporate social contributions; But it is always difficult to predict the effects of reforms. If they fail or have only a small effect on the employment rate and potential growth, France will face low growth and a deterioration in public finances in the future . It is not clear what alternative economic policy plan could then be put in place.