France analysis of the day

Macron had promised to reduce state spending — then a record at more than 56 per cent of gross domestic product — by about 5 percentage points. Instead, under pressure from protests and the pandemic, state spending rose to a staggering 60 per cent of GDP. France’s government spending is 15 points above the average for developed economies.

Moreover, that gap is explained less by heavy spending on education, health or housing than on welfare programmes, which at 18 per cent of GDP is nearly double the average for developed economies. France is stuck in a welfare trap, spending generously on income transfers but pushed by voters to spend even more, given discontent with the rising cost of living and with inequality.

Here is more from Ruchir Sharma at the FT.  And this:

Total billionaire wealth doubled under Macron to 17 per cent of GDP, and nearly 80 per cent of French billionaires’ wealth is inherited — among the highest in the world.


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