France’s vicious circle

France's vicious circle is as follows: when there is a structural problem, the problem is not corrected, but attempts are made to mitigate its consequences through public spending; this then leads to an increase in the tax burden, which exacerbates the structural problem. Let us give two examples of this vicious circle: The employment rate is low in France, in particular because labour force skills are low. There has been no improvement in skills, on the contrary; the low employment rate necessitates high government spending (welfare transfers to the unemployed, aid to families, etc.) to correct its effects, leading to a high tax burden on companies and an even lower employment rate, due in particular to the link between the weight of social contributions and the employment rate; France’s attractiveness for companies is low (high labour costs, high tax burden, low skills). To correct this, successive governments have increase d public aid to companies; but the financing of this aid increases the tax burden on companies and therefore worsens the attractiveness even more. The right strategy would be to conduct structural reform policies that increase the employment rate and improve France’s attractiveness: improving skills, state reform and pension reform that will make it possible to reduce the tax burden. The solution is not to refrain from carrying out these structural reforms and, as a result, to be forced to increase public spending (welfare transfers due to the low employment rate, public aid to companies).