Hollande’s choice: It will take more than a government reshuffle to restore France’s economy. But is the required courage there?

As much the weakest president in the history the French Fifth Republic, there cannot be much confidence that François Hollande will fix the French economy’s deep-seated weaknesses. We can only hope that the President and Emmanuel Macron, his new Economy Minister, will succeed where their predecessors – of both parties – have failed so dismally. The record is discouraging.

Running scared after his disastrous showing in the local elections last spring, President Hollande appointed a leftist, Arnaud Montebourg, to run the economy. This was designed to do two things. First, it would offer the voters the (false) hope that there was some pain-free route out of their difficulties. Second, it was an act of appeasement towards the left of M Hollande’s Parti Socialiste. Well, much good it has done him. After only a matter of months M Hollande had to dissolve his government, M Mountebourg has taken the opportunity to deride his former boss, and, rather more important than any of that, the French economy remains resolutely unfixed.

One day we may learn whether President Hollande sincerely believed that M Mountebourg was really the answer to France’s problems. If he was sufficiently candid M Hollande might confess in his memoirs whether he ever seriously thought the manifesto he presented to the French people two years ago was sustainable, or just a clever, though cynical, exercise in flattering the well-known prejudices of the French electorate. Either way, M Hollande and his new team need some radically different policies if they are to succeed.

The stakes could hardly be higher; France’s failure to adjust to globalisation has left her with dismal growth and unemployment that remains stubbornly high. At more than 10 per cent nationally, and concentrated among ethnic minorities in the banlieues, it remains a potent threat to France’s social cohesion, the very thing that M Hollande’s socialist approach was supposed to foster. As the second largest economy in the eurozone, France is “too big to fail” from the point of view of the single currency project; but she is also too big for even Germany to save. Without France there can be no euro, and without the euro the European project – the foundation of French policy and identity since the Second World War – will collapse.

M Hollande’s predecessor, President Nicolas Sarkozy knew what needed to be done, though he failed to convert analysis into solid legislation and achievement. As M Sarkozy could at least recognise, France, like much of the rest of the eurozone, desperately needs to free up her labour market; to shrink the size of the state; to relieve business of burdensome regulation; and to scrap her chauvinistic industrial policy, which deters foreign investment. A dose, in other words, of Anglo-Saxon Thatcherism as well as the “German” austerity is required – alien notions feared and loathed across France.

France has been fortunate to avoid the “contagion” that spread from Greece to Spain, Portugal and Italy. That does not mean that investors will continue indefinitely to buy French government bonds issued by M Hollande. It is a brave leader indeed who would confront the French people with the current threats to their national and European future. Unfortunately, bravery is a commodity currently in short supply at the Elysée Palace.