April 19th, 2012
03:31 PM GMT
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London (CNN) – On Sunday the French head to the polls to elect the next French president. Voters may be intellectualizing who offers the best deal for them, but the business community has a different set of priorities.

They want changes to the business environment and more flexible labour laws to allow them to flourish. Yet I’ve spoken to bosses who fear that instead, the next President of France will tax small and medium firms out of business.

The French economy desperately needs structural reform. Unemployment, at 10%, is higher than it has been for 12 years, public spending is too high and growth is a piffling 1.7%.

How election will be decided

Other European countries in economic strife have embraced austerity packages: Think Italy, Ireland, Portugal and Spain. Admittedly, there are varying levels of success, and austerity is never going to be a vote-winner.

While the economic problems of those countries have by no means gone away, their leaders have at least acknowledged the need for drastic measures: Short or medium-term pain for long-term gain.

The alternative is Greek-style high drama. But none of the French candidates seem to have grasped that reality.

Sarkozy relishes battle

Of course the goal for all the candidates at this stage is to appeal to as broad a range of voters as possible without alienating their core support base. So, we’ve heard all kinds of rhetoric, from the bog-standard promises of security for social benefits and employment rights, to wildly spending the way out of recession, from public funds that are already overstretched, perhaps subsidized by higher taxes for the rich in particular.

There has been talk of expanding the European Central Bank’s remit to cover growth by lending to countries like France, in a political move that would ultimately undermine the ECB's role.

Heck, even president Nicolas Sarkozy has dragged Europe into the debate, pandering to the euro-sceptic camp and beyond with vague talk of somehow distancing the eurozone’s second largest economy from the EU itself.

None of the above does any more than pass the buck.

Socialist front-runner Francois Hollande categorically blames Sarkozy for the French economic woes. Communist Jean-Luc Melenchon chimes in, also scorning Anglo-Saxon capitalism with “stinking money.” Sarkozy’s line is that everything his opponents promise will mean financial doom for France.

Hollande boosted by DSK scandal

Early on his campaign he said that the French should be more like the Germans. When Marketplace Europe went to the Alsace region in France we got a taste of what that means for business.

Being so close to the German border has fostered cultural and economic ties where French firms have incorporated German-style ways of doing things into their day to day operations which they would like to see rolled out nationwide. Anne Leitzgen, boss of kitchen makers SALM in Selestat, along with the Mayor of Selestat would both like France to adopt more apprenticeships schemes to get young people into the workplace.

Le Pen: Right wing wild card

Other measures include having more part-timers and government subsidies for salaries to help companies keep staff on the books during tough times, so that they are good to go when business picks up again.

In short, French business would welcome a major shake-up of the labour market, making it more flexible, taking powers away from the trades unions but effectively stripping France of many of the employment perks they so cherish.

That would give businesses more scope to invest, expand and grow, just like Germany’s “mittelstand,” the cluster of medium-sized businesses which form the backbone of the German economy.

Are any of the candidates brave enough to rise to the challenge? Whoever is elected the next President of France will need to show he has more than just good intentions but also the political will, nerve and support to implement reforms that businesses - big, medium and small - needs.

soundoff (4 Responses)
  1. Marco Hsiao

    France is second or third largest maker for millions of African black slaves; 1/3 of African black slaves were tortured to die in Europe's ships. France is also the second evilest invader in history.

    France violates human right, violates freedom and violates morality seriously; but Lies are spoken continually. French fortune bases on evilest invasion. Every African or Asian country all have 100 times better record on human right than France.

    Every suffering country in Africa or Asia should get apology and compensation (US$ 20-45 trillion) from immoral France. The world must have human right, human dignity and justice. South Korea is surpassing France on trade and auto industry. Possibly declining should be the only destiny for future France.

    (This comment is sent from Shenzhen in Mainland China during my foreign travel)

    April 22, 2012 at 8:12 am |
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