France: headed for the deep merde
France is in upheaval. Arguments erupt live on TV, demonstrations block the streets, strikes shut down plants, and threats of mayhem are part of the show [French Workers Threaten To Blow Up Their Factory].
The problem: an economy where businesses are suffocating under an obese public sector. Ever larger budgets have been the only source of economic growth. But now that model has run aground.
I have visited the factory a couple of times. The French workforce gets paid high wages but works only three hours. They get one hour for breaks and lunch, talk for three, and work for three. I told this to the French union workers to their faces. They told me that’s the French way!
In its just released annual report, France’s state auditor, the Cour des Comptes, told the government that it was dreaming. Its forecast of 0.8% growth for 2013 was way high. Try 0.3%. And forget about the budget deficit target of 3% of GDP, which had been based on that illusory 0.8% growth. And even if growth came in at 0.8%, the deficit would still be above that all-important 3%.