Zakaria on Sarkozy

clipped from

If he succeeds, it could be the beginning of the biggest turnaround in Europe since Margaret Thatcher revived Britain in the 1980s.

Contrary to caricature, the French economy does not need a complete overhaul. It has many highly competitive aspects. Labor productivity is as high as in the United States, the health-care system is excellent and cost-effective and French infrastructure—from high-speed rail to broadband—is unparalleled. But the cancer eating away at the economy is a set of laws coddling French workers, which makes hiring and firing arduous, and pensions and benefits hugely expensive. (This is why France has a chronically high unemployment rate, currently 8.7 percent, which is 50 percent higher than the average for the industrialized nations.) If France fixed its problems with labor flexibility, it could be catapulted forward by higher growth and lower unemployment, which would make the whole system much more sustainable.

  blog it
Published in: on November 25, 2007 at 10:35 pm  Leave a Comment  

The URI to TrackBack this entry is:

RSS feed for comments on this post.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: