France’s growth has become structurally weaker than that in the rest of the euro zone: Why?

Since 2014, growth has become structurally weaker in France than in the rest of the euro zone despite France’s more expansionary fiscal policy and stronger recovery in credit, as the highly expansionary monetary policy has had a larger positive effect than in the rest of the euro zone. The question is whether France’s weak growth is due to: Demand-side factors (real wages, savings behaviour , corporate investment behaviour ); Or supply-side factors (barriers to increasing production: production costs and product sophistication, labour force skills and hiring difficulties, distortionary taxation). We see that investment has grown less in France than in the euro zone, weighing on demand but above all on supply due to insufficient capital modernisation. Moreover, high labour costs and low labour force skills in France curb hiring and inhibit supply.