In search of France’s lost competitiveness

Folder. What does industrial France weigh on the world stage? Less and less, judging by the latest competitiveness indicators. And, for once, no need to incriminate the Chinese. In 2020, on the European market alone, the share of French products fell by one point. They now represent only 13.5% of total sales in the euro zone, against 18% in 2000. It is the whole story of deindustrialisation that unfolds behind these figures, symbolized by the disappearance of the large automobile factories and their hundreds of thousands of jobs. However, we had believed in an improvement between 2017 and 2019. But suddenly, it is the relapse.

This “marked degradation”, according to the COE-Rexecode institute which published these figures in March 2021, is of course attributable to the decline in international trade linked to the health crisis. This has severely affected certain traditionally exporting sectors, such as aeronautics. But this does not explain everything… “What is worrying is that we are witnessing a general fall in export market shares for each product category, which is not the case in neighboring countries, specifies Emmanuel Jessua, director of studies at COE-Rexecode and author of the note. The poor French performance cannot therefore be explained by a specialization effect. “

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France had significantly regained ground in recent years thanks in particular to the measures taken since 2012 by the various governments. Highly contested on the political level, the tax credit for competitiveness and employment (CICE), carried by François Hollande, played a role in this relative improvement, by reducing the cost of labor. For its part, the reduction in corporate tax, which has reached the level of that in force in Germany (28%), has also had a positive effect, as has the new convergence of economic policies carried out on both sides of the Rhine.

Lower labor costs or taxation

How to get out, under these conditions, from the 2020 air hole? Of course, on the fiscal side, the effort continues. “The 10 billion euros reduction in production taxes, contained in the end-2020 stimulus plan, represents a major budgetary effort, recognizes Emmanuel Jessua. But we started from very high. Production taxes, which represented 3.2% of GDP, fell to 2.8%. We are still well above the euro zone average, which is 1.6% while Germany is at 0.4%.

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