Data released last week showed that the French economy could be hindering the eurozone recovery and that the country could be headed into another recession.
Despite an uptick in manufacturing across the region and in the U.K. and U.S., French manufacturers reported a decrease in November for the 21st consecutive month, City A.M. reports.
“France is now the weakest link in Europe, the only major economy with serious problems that is not doing anything about them,” Berenberg Bank’s chief economist Holger Schmieding said, according to City A.M. “The jobs market is overregulated, and labor is far too expensive, especially for the least qualified posts. Along with high tax rates, these are an impediment to business investment too.”
French President Francois Hollande was elected on a platform of job creation and employment, but his current policies have led to rising unemployment and periods of declining GDP.
The country’s poor performance over the past five months may indicate that France could enter another recession, after its economy shrank by 0.1 percent in the third quarter.
“The sector will be suffering particularly, as export-focused firms will struggle with a strong euro,” Jonathan Loynes, the chief European economist at Capital Economics, said, City A.M. reports. “Generally speaking, the outlook appears to be pretty poor. If anything, France looks like it’s slowing further, staying in recession or heading back in.”