On Tuesday, April 17, the Center for the Study of Europe, in cooperation with BU Study Abroad, hosted the French Consul General Christophe Guilhou, for a talk on “France Today.” William Keylor, Professor of International Relations and History and a member of the Center’s executive board, introduced the Mr. Guilhou who, though unable in his diplomatic role to discuss the upcoming French elections, nevertheless had much to say about Europe’s second largest country.
He began with the positives: France is a wealthy country of 65 million people, with the highest birthrate in Europe. It remains a significant economic power – it is Europe’s second largest market – and a popular tourist destination.
He then addressed some of the challenges: economic growth is insufficient and France is facing major problems in terms of competitiveness. Industries are migrating to places where labor is cheaper. According to Guilhou, France needs to re-adapt its economy in order to remain competitive. It’s social system – once ranked as the best in the world – is under strain. While life expectancy remains very high (second only to Japan) and the care system continues to be very good, there are problems financing it – current deficit levels are unsustainable. Finally, France continues to struggle to integrate its minorities, mostly workers from North Africa. France is engaged in reform, he said, including pension reform, and offers some of the most attractive R&D tax incentives in Europe – but the challenges remain formidable.
Guilhou took a moment to correct the image of France as a country of lazy people. He said in fact France is the third most efficient country in terms of hourly labor productivity, and there are fewer strikes in France than even Germany. It is the third investor around the world.
As for the French language – it is spoken by 250 million people in approximately 50 to 60 countries around the world.
He went on to explore the questions: “What is France in Europe and how Europe impacts France?”
Europe today has a population of ~500 million people; taken as a whole, it is bigger than US and has a higher GDP than the US. According to Guilhous, the European project is working, and France – a founding member of the European Union – has no choice but to continue the integration process. Meaning, France will have to accept some from governance from Brussels, including taxation.
Guilhou could not ignore the Eurocrisis. He argued that the Euro has been a success story, reminding listeners that the currency has remained stronger than the dollar throughout the crisis. European inflation continues below 2%, average public debt across the Eurozone is 85% of GDP (compared to 100% in US), and the Euro represents 25% of world reserve currency (the dollar is about 33%). More importantly, the struggling economies of Ireland, Portugal, and Greece together comprise only 6% of Eurozone economy. He blamed the crisis on “cheap money” (when the Euro was created, interest rates were retained at low German levels, which incentivized borrowing over debt reduction) and also on the “political” decision to include Greece with no conditions.
He said unequivocally that France will not leave Eurozone (he did not think it would be possible for Greece to leave either), that France will continue to pursue deeper integration and to reinforce the Euro while reducing its public deficit, adapting reforms that will allow it to become more competitive, and accepting new discipline from Brussels.
Finally, Guilhou took up France’s role in the world. Over against the view that France and Europe are declining powers, he asserted that Europe today represents 31% of global GDP. France continues to play a role in international security efforts in Libya, Afghanistan, Somalia and other countries. It is, moreover, a vital economic partner to the United States. The transatlantic relationship accounts for ~50 percent of world GDP. US investments in France alone are greater than those in China and India combines. French companies in the US employ more than 500,000 people, and the same is true of American companies in France.
In sum, Guilhou argued, France continues to be an important player on the global stage. It is facing challenges adapting to the global economy, but its future remains solidly within Europe. Only within Europe will it return to competitiveness.