“It’s getting better,” as stated by François Hollande, or they have made things “half” as ensures Emmanuel Macron? At nine months of the presidential election, the French Economic Observatory (OFCE) released on Monday of his five-year economic record. For the institute, rather classified left, “France is showing signs of recovery in recent months, despite high unemployment and public finances difficulty finding the path to balance.”
Lighting Nicolas Bouzou , consultant, Olivier Passet , Director of syntheses within the firm Xerfi, and Bertrand Martinot economist and former social Advisor to the Presidency of the Republic from 2007 to 2008.
in terms of growth, could do better
in his study, OFCE “growth slowly recovered.” In the second part of five years, “French growth should max out of the eurozone through the first positive effects of the policies of supply and alleviation of fiscal consolidation.” The OFCE points in particular to the role of the Pact of responsibility and competitiveness employment tax credit (CICE) in this recovery. As Michal Sapin had done some months before him.
But in parallel, the OFCE estimates that the budget choices have hindered the recovery. They cut the growth “of 0.8 points per year on average between 2012 and 2017″, depriving the GDP “5% over the first four years of office.” “The pace of deficit reduction was too fast, said Xavier Ragot, President of the Institute. At the time the tax increases were decided, the recovery was still fragile. So, it stalled in the coast “.
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“In terms of budget choices, the fault does not only returns to the current majority, added Nicolas Bouzou. François Hollande like its predecessor, believed that increasing the tax burden would be neutral for the economy. It is missed. ”
However, Olivier Passet judge that François Hollande has “sailed relatively clever way.” “He had minimal austerity policy in relation to what we required the EU, said the director syntheses Xerfi. Of course it has punctured growth. But it could easily tip the side of France Spain and Italy yielding to the demands of the European Commission. it often criticized this in-between, but I think it has the merit to maintain zero growth. ”
thumbs down on the employment front
It was one of the challenges of five years. But employment is the subject of a “recovery too slow,” laments the OFCE. “Unemployment according to the ILO (International Labour Office, ed) would increase by about 100,000 people despite 720,000 job creation” in five years, due to population growth.
“The budget choices (…) was the main factor of the increase in short-term unemployment” peak Xavier Ragot from Voices . As for measures to revitalize the market, “they are artificial,” Bertrand Martinot tackle.
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“As growth is not there, we increase the training inputs But what happens t-?. it when these people return to job center? when the temporary hiring bonus for SMEs end? “slice economist. The OFCE puts forward however the contribution of CICE and responsibility Pact, which “would create or save about 230 000 jobs by 2017″. “But they came too late for correction of fundamental errors early in the mandate,” laments Bertrand Martinot.
“The employment record of François Hollande, is that the increase in mini-jobs, short CSD and self-entrepreneurship,” said Olivier Passet. According OFCE 440 000 people are also vulnerable in relation to the job since 2012. “However, the employment balance remains above what could be expected from the state of the economy. Despite a rate of almost zero growth, the French economy has created jobs, “moderates Olivier Passet.
A fiscal adjustment yes, but high price
“The mandate of François Hollande has been placed under the sign of the recovery of public accounts,” comments OFCE in his study. The research institute highlights the calculations of the European Commission, according to which the French structural balance improved by 2.5 points between 2012 and 2016. Except that this improvement in public accounts was realized at the price a sharp increase in tax burden.
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“Not only the measures were not carried on spending, but the more officials continue to rise, which strike lasting public finances will prevail Bertrand Martinot. health expenditures are certainly mastered, those retreats also, but state spending and local communities continue to skid. C ‘ is there would have had to intervene the heart of the action. ”
A beautiful improving corporate margins
After a sharp deterioration, French companies observe a recovery of margins. The OFCE figure to two points the progress, because, again, tax measures (CICE and responsibility Pact) and lower oil prices. In industry, the recovery is “particularly dramatic”, with a “comparable to the historical records of the early 2000s,” points in particular to the OFCE.
“After the 2008 crisis, no government could not ignore the issue of margin erosion, explains Olivier Passet. This helps curb such low valuation of companies, which have been prey in the frameworks of international acquisitions mergers. so it’s a positive. ”
“In total, the balance Francois Hollande is that of a president who played defense all throughout his mandate. In this respect, it is quite correct, concludes Olivier Passet. But on offensive side -The ability to open new potential growth, to have an industrial policy could create a structural engine box, make its mark on the following European level, the account is not there. ”
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