France’s Economic Struggles and Declining GDP
France’s GDP per capita has slipped into the lower half of European Union nations, marking a troubling trend in global governance. Once viewed as one of Europe’s wealthiest countries, France, known as La Grande Nation, appears to be experiencing significant economic troubles, particularly over the past decade, which many attribute to the leadership of socialist François Hollande and globalist Emmanuel Macron.
Recent analysis, based on Eurostat figures projected for 2024 by Le Figaro, reveals that France’s GDP per capita is now 2 percentage points below the average of the 27 EU member states. This indicates that an average French citizen currently has less wealth than those in Luxembourg, Ireland, the Netherlands, Denmark, Austria, Belgium, Germany, Sweden, Malta, Finland, Italy, and Cyprus.
If we look back fifty years, France was economically comparable to Germany, but there’s been a continuous and alarming decline since then. Today, GDP per capita figures show an 18-point disparity between the two countries (98 for France compared to 116 for Germany).
Interestingly, Denmark had a 13-point lead over France back in 1975, but that gap has widened to nearly 30 points as of 2024.
Mathieu Planu, the deputy director of the French Economic Observatory (OFCE), pointed out two significant downturns in France’s economy. The first occurred during Hollande’s administration from 2013 to 2017, when the country moved from being nine points behind the EU’s average GDP per capita down to just three points. However, the decline has notably sped up under Macron, with the GDP per capita dropping further from 104 in 2020, to 101 in 2021, and down to 97 in 2022.
During Hollande’s time in office, a mass exodus of wealth took place, fueled by a so-called “super tax” on those with annual incomes exceeding one million euros. High-profile figures like actor Gérard Depardieu left France to escape these steep tax increases. Although the tax was annulled in 2012, a more manageable 50% tax on businesses ensued, requiring companies to compensate the government for employing high-income earners.
Macron, having risen to power in 2017 with promises focused on economic rejuvenation, now faces a record high of 7.7 million foreign-born residents in 2024, accounting for more than 10% of the population. In theory, this aligns with his goal of fostering a growth-oriented economy via pro-business reforms, which include a reduction in corporate tax rates and trimming government expenditures.
However, as Macron approaches the end of his second term, he’s found himself needing to rely on the Socialist Party to push through contentious budgets without parliamentary votes, which has led to increased public spending and further tax hikes. This scenario has played out after various administrations struggled with substantial debts incurred from strict lockdown measures during the pandemic between 2020 and 2022.
Benoît Perroille, an investment leader at Natixis Wealth Management, has argued that some stagnation in France’s productivity can be tied to Macron’s pandemic strategies. He suggested that the choice to retain workers in companies rather than allowing for necessary layoffs prevented a beneficial labor market adjustment that was seen in surrounding countries.
While government policies are often blamed for the economic situation, others highlight underlying structural issues, particularly an aging population. According to Le Figaro, France has the lowest share of workers aged 20 to 64 within the EU, and yet there are struggles to fill jobs, with low employment rates for young and older individuals alike.
This challenge is further complicated by continuous efforts from successive governments in Paris to stimulate economic growth through the importation of a growing number of foreign workers. With the foreign-born population reaching record levels, there is a noticeable correlation between economic stagnation and mass immigration observable not only in France but also in the UK and other European nations, raising concerns about promises tied to open borders for economic solutions.
