France Fails to Liberalize-France Fails to Grow
And the political outlook is anything but good. When the government attempted to impose a modest liberalization of the strict labor laws, spoiled students protested and the government proved themselves to be the "cheese eating surrender monkeys" neocons accuse them of being. And as this The Economist story points out, the socialist opposition wants further spending increases.
Not surprisingly, the French economy performs very poorly. While one shouldn't read too much into the zero growth number for the third quarter (which largely reflected depletion the inventories built up in the previous quarter), the year over year growth is nevertheless significantly below the Euro zone average.
While France in recent years have outperformed Germany and Italy, this only reflected demographic factors (France's population is ageing much slower than in Germany and Italy). And at any rate outperforming Germany and Italy isn't much to brag about. Tax increases in Germany and Italy next year could perhaps ensure that France next year will once again outperform them, but this will only be because Germany and Italy performs worse, not because France performs better.