Company Finances: France is Losing Ground

To overcome the crisis in which it has been enmeshed for some years, France has little choice but to improve its competitiveness. The French government certainly understands this. However, apart from the demands of budgetary austerity, which has led it to intensify the fiscal pressure on households and companies, there is another problem: namely, the financial situation of companies in the country. As Gilbert Cette and Arnaud Sylvain show here, by comparison with a number of other major industrialized nations (Germany, Spain, USA, Italy, UK) the analysis of various indicators over the last two decades (operating margins, savings ratios, net income, debt ratios etc. of non-financial companies) suggests that French company finances have deteriorated appreciably and durably –a finding which, if it were confirmed in the future, would not augur at all well for productive investment, household income, wealth creation and, consequently, economic growth in France.