What needs to be fixed in France

The French government has launched a number of reforms (education, labour market, taxes, support to the sectors of the future, vocational training and apprenticeship, healthcare, pensions). These reforms aim to correct the French economy ’s structural disadvantages, the most severe of which are: Low labour force skills, which start with the low efficiency of the education system, and which are a key cause for the low employment rate in France and companies’ recruitment difficulties; The weak modernisation of companies’ capital, which helps explain the market share losses, the deindustrialisation and the deterioration in foreign trade; A tax system that discourages employment , implemented to finance very generous social welfare and large-scale redistributive policies, which is necessary because of the low employment rate, hence this vicious circle: The low employment rate leads to a tax system that discourages employment . If these structural disadvantages are not corrected by the reforms, France will not avoid a macroeconomic adjustment, in particular falling wages.