The major economic issues for debate in the French presidential campaign

The following articles bring together the range of issues raised by France’s structural problems and which should be at the heart of debate in the country’s presidential campaign. France’s existing structural problems not only slow current growth. They also prevent the financing of the investment needed for future growth. These problems are well known: deindustrialisation, market share losses, deterioration in foreign trade, high tax burden, high public spending, high youth unemployment, low skills among young people and the labour force, and so on. We believe that these problems stem from a central structural problem: a lack of skills among both young people and adults. Weak skills slow growth, as companies cannot recruit the skilled labour they need to modernise their production processes and innovate, leading to a loss of corporate competitiveness. They also explain the low employment rate, which has consequences for purchasing power and the persistence of significant income inequality before redistribution. In addition to curbing current growth, weak skills and the low employment rate also curb the ability to finance both corporate investment and public investment. This is because the income inequality that results from the low employment rate is reduced by the presence of large-scale redistributive policies. Yet these redistributive policies increase the tax burden facing companies, which restricts their ability to finance investments. Moreover, the weight of redistributive policies in public finances also curbs the financing of public investment. This brake on investment then reduces potential growth. However, while an improvement in labour force skills seems essential to lessening France’s structural problems, the already-high weight of public spending reduces the scope to finance the training needed to improve skills.