The United States is far from the only country that is desperately trying to get back some of its former economic glory. Out of all of the EU nations in economic turmoil France is far from the worst, but the country has been struggling to jump start its economy for decades. Other European nations like Spain and Germany have been adopting polices that make their country’s much more business friendly since the 1990s, and now France is looking pretty expensive to businessmen in comparison to their neighbors.
French labor costs are the highest of any major EU economy, and taxes have risen considerably over the past few years. France recently lost the business of Michelin which closed its 52 year old factory in favor of moving operations to Spain, and it’s possible that other companies could plan on jumping ship to cheaper nations. These events paired with the fact that the country’s economy has barely grown over the past few years spells an economic dry spell for France, but its president recently announced plans to bring some money back to the struggling EU nation.
President François Hollande is planning on jump starting the French economy by investing billions in up and coming technology. When you look at the country’s past economic success with revolutionizing nuclear power and high speed trains Hollande’s plan seems practical, but some economists are doubtful that the investments will have much of a payoff.
Pumping nearly 3.7 billion euros into industries that are working on 3D software, robotics, and other futuristic technology seems very similar to ex-president Nicolas Sarkozy’s plan to pump money into emerging technologies in 2010. That plan was 5 billion euros worth of failure, nearly three years after his Hail Mary plan corporate profit margins in the country are the lowest they’ve been since 1985. Corporations are already wary of settling down in a country where wages and business taxes are high, so for this to work France would need to not only keep the companies that are already in the country, but also somehow attract other companies that could easily do business in cheaper surrounding countries. Only time will tell if the plan will work, but most economists are doubtful that it’ll help.