France is financially more unstable now than Britain was at the time of the 1976 bail-out by the International Monetary Fund, says a well known businessman.
Axa’s group chairman and chief executive, Henri de Castries in an interview given to The Sunday Telegraph told that French government lead by president Hollande should take lessons from the Britain’s experience.
The chairman of the world’s largest insurer by premium income said that UK was not in a very good shape in the early 1970’s and “Mr Hollande has to decide if he wants to be Harold Wilson or Tony Blair.”
“So far he has been ambiguous. I hope he is going to go for Blair. I am not asking him to become Margaret Thatcher.”
“It could get worse but I am convinced that at one stage or another, reason will prevail.”
Times Have changed
James Callaghan’s, who succeeded Mr Wilson as prime minister, call for a relief package of a £2.3 billion loan in 1976 is considered as the most difficult times for the Britain, in the post war era. On being asked in whether or not, presently, France is in a worst state than was Britain, the businessman replied “Yes, because the world has changed.”
Mr de Castries told that with the availability of technology, capital and talents things are moving much more quickly than they were in 1970’s or 1980’s. This pace is making lack of action, vision and priorities a much more difficult thing, he added.
Agrees With EU
The European Commission last week suggested France to cut on labor costs, make changes to its pension system and open its market to bring back the budget deficit under 3 percent.
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According to the businessman, the move from European Commission is a right call for France and the country is in “dire” need of such structural changes.
Changes Required For France
Mr de Castries also pointed out that France’s public spending of 56 percent is 10 percent higher than the average of the other Eurozone countries. And the difference of 10 percent comes to about €200 billion (£171 billion) a year in France’s €2 trillion economy. This money could be utilized in a better way by providing it to peoples’ who know how to make money, create jobs and foster growth rather than spending it on public projects, which do not have “any significant rate of return” and in turn reducing the competitiveness.
He also warned that presently the economic problem in the country is causing a huge exodus of young talent along with lower foreign investment. These are the results of the government’s unfriendly taxes and employment laws, and due to which business confidence and investments are going down.