French President Francois Hollande and his marketing gurus are on the offensive with their “Say Oui to France” campaign, meant to convince investors that the French economy is worthy of their money. Among the selling points: France’s large population; thriving nuclear, aerospace, and chemical sectors; and good location. According to Industry Minister Arnaud Montebourg, these attributes make France “extremely competitive, better than Japan, Australia, the US and Italy.”
Au contraire, Monsieur Montebourg. France has a lot to learn about what it takes to attract business. The Democratic Republic of the Congo has a similar sized population, but you don’t see investors flocking there. While France’s nuclear, aerospace, and chemical sectors might be large, its biggest sector is its government, which makes up 56.1 percent of the economy. France’s location as a “strategic springboard” is notable; however, government policies have nothing to do with it. If anything, France’s convenient coastal location will only act as a vector for goods flowing to and from economically free and prospering countries in other parts of Europe, like Estonia, Switzerland, and Poland.
The fact is that France has the most repressed economy on the continent. According to The Heritage Foundation’s 2013 Index of Economic Freedom, France ranks dead last among all European countries in government spending. A strict labor code and poorly managed fiscal policy weigh on the economy. Debt accounts for over 86 percent of its GDP, and its score on government spending is one of the lowest in the world, ranking close to other economic powerhouses like Lesotho, North Korea, and the Solomon Islands.
These problems are beyond the purview of any marketing department. To attract investment, France must tackle the serious institutional and economic deficiencies that are scaring away the very investors it is trying to attract. An economic freedom agenda that reduces the deficit and debt, liberalizes an incredibly rigid labor code, and removes non-tariff barriers should be Mr. Hollande’s selling points.
French writer Victor Hugo said, “There is nothing like a dream to create the future.” France’s dream must be economic freedom.