Panic in France as economy spirals towards ‘third world status’ | World | News
France has fallen behind the European Union’s wealth list and is at risk of achieving “third world status”, a former civil servant has warned. France, once among Europe’s richest countries, has fallen to second place after recording per capita wealth below 100, the bloc’s average, for three consecutive years, according to Eurostat data. It’s long gone GermanyWealth per capita used to be economically equal at 111 and has even fallen behind the United Kingdom at 99 and 98 respectively.
Italy, which was 10.1% poorer than France in 2020, has also caught up with its economic rival, with per capita GDP by 2024 at $59,453 (£43,413) for Italy and $59,683 (£43,581) for France. Nicolas Baverez, a former senior civil servant, warned that his country was entering a “hellish spiral” and described it as the “Argentina of the World”. “Europe” in an article published for Le Figaro, pointing to the South American country’s long-term economic instability.
He wrote: “Our country has become the Argentina of Europe. France is trapped in a hellish spiral that has propelled it to third world status.”
Law professor Frédéric Douet also warned that “expensive and inefficient” policies would trigger the “slow impoverishment” of France.
“The motto of our technocrats and politicians is that tax increases will solve our problems,” he warned in Le Figaro.
But this week’s budget also highlighted the deep divisions in France’s fractured parliament; This was evidenced by the difficulty of reaching consensus and the fact that Prime Minister Sebastien Lecornu received two votes of no confidence on Monday.
Lacking a majority in parliament, he was forced to make concessions to the Socialist party, including suspending President Emmanuel Macron’s unpopular decision to raise the retirement age from 62 to 64.
France has the EU’s second-largest economy but is struggling to close a budget deficit of 5 percent of GDP; public expenditures will decrease slightly from 56.8 percent to 56.6 percent this year.
Businesses will have to shoulder several tax increases after the budget, including an extra tax on profits made by large companies, which are expected to raise $7.3bn (£6.3bn) in 2026.
But the national debt, currently at €3.4 trillion (£2.9 trillion), is expected to rise further this year after becoming the EU’s highest consolidated national debt in absolute terms last September.
