France in a Bind

Not a good time to be a politician or businessman in France right now. In order to compete globally, France needs to have more flexible labor laws. But French society views the public sector quite differently than the U.S., or even Canada. The best and brightest in France (the equivalent of the Ivy League grads) aspire for goverment positions. The average French citizen wants to maintain current levels of goverment spending and social welfare.

The problem is that most jobs reside in the private sector. Companies want more flexible labor laws, while politicians realize that some reforms are necessary, the public is not willing to accept that they live in a globalized economy. The center right goverment has blocked several proposed takeovers of French companies -- most of the takeovers being initiated by other EU companies. The French policy seems to be: "We want a strong and united Europe, but only if our companies, our language, and our culture prevails." As I pointed out earlier, monetary union does NOT make sense in light of the economic nationalism that seems to be getting stronger.