Working Paper (2012-05), The "culture of stability" in France: Is the growth regime sustainable?
Is there in France, as is the case in Germany, a “stability culture”, that is to say a consensus around the idea that the economic growth of a developed country can not be sustainable in a monetary union without a sound fiscal and budgetary policy, a relatively stable general price level, and without production conditions allowing to avoid a raising external debt?
The evidence shows that a fairly strong convergence with the German stability culture has actually occurred for a range of indicators including the budgetary and fiscal policy, as well as the monetary policy. However, and particularly in view of the attitude of experts, social partners or opinion polls, some behaviors observed in France continue to differ significantly, notably on the role the central bank, or about the structural reforms aiming at increasing international competitiveness.
These differences stem themselves from the persistence of various structural, institutional or mental factors. The series of crises that occurred in France since 2008, however, renders the status quo untenable, and challenges the growth regime that has prevailed in France for nearly fifteen years, and which has probably been too much based on debt. Such a shift requires to a large extent the strengthening of the competitiveness of the production capacities in France.
- Keywords: sustainability of the growth regime; fiscal policy, central bank independence; structural reforms; international competitiveness.
- Author: Rémi Lallement