France criticised as trade figures fail to impress

FRANCE’S economic woes are showing little sign of improvement, with analysts pointing to a notably poor performance in trade data from the Eurozone for the first nine months of the year.

Berenberg chief economist Holger Schmieding called France “the real sick man of Europe”, adding: “The major reason why France now sticks out as the real problem of Europe is that most of the usual euro crisis countries have improved so much.”

According to yesterday’s figures, France had the biggest drop in outward trade in goods among the Eurozone’s four largest economies between January and August, when compared to the same period in 2012.

French goods exports fell by two per cent, while Germany’s and Italy’s only dipped by one per cent. Spain’s exporters saw a five per cent boost over the same 12 month period.

France’s imports also fell by three per cent in 12 months, leaving the country with a €50.1bn (£42bn) trade deficit. The deficit during the first eight months of the current year dropped by only 11.3 per cent, compared to a year earlier. In the same period, the UK’s trade deficit in goods contracted by 57.2 per cent, falling to €44.5bn and leaving France with the largest negative imbalance in the EU.

“French politics are indeed a serious tail risk for Europe,” Schmieding added, noting a resurgent ultra-right Front National, President Francois Hollande seeing the lowest opinion ratings ever recorded, and “the French tradition of staging major protests against even small changes to perceived entitlements.”

James Howat of Capital Economics concurred: “While France may regain some lost competitiveness against Germany, more radical reforms in the periphery suggest that France might continue to lose ground to them.”

The Organisation for Economic Co-operation and Development (OECD) also criticised the country’s prospects in a report last week, voicing some of the same concerns on the pace of economic reform in France.