Proving True or False 10 Clichés About France

This just arrived in my in-box and it was impossible to avoid a chuckle. The French government is now using social media and marketing tactics to make you think differently about them, France and the French. On their site, in English, the headline reads:

“Attractiveness, productivity, taxes…10 clichés about France proved wrong once and for all!”

Part of the reason for a chuckle is that at the bottom of the site, it notes “Unless otherwise indicated, texts of this website are under Creative Commons license.” Do they not want anyone to pass this on? Wouldn’t you think they would? That’s like when a shopkeeper runs out of their shop to tell you that you can’t take a photo of their display window, when it’s out there for all to see, enjoy or even ‘copy!’ (I have never understood this kind of protectionism in lieu of promotionalism, but then again, I’m American, and was taught to think that ‘imitation is the sincerest form of flattery.’)

Nonetheless, there is no doubt that all this positive propaganda is in response to all the negative press that floats around about France. Just for the sake of playing the ‘devil’s advocate,’ and I apologize here for offering the ‘ying’ to their ‘yang,’ but here’s what the French government thinks we believe about them, what they have to say about it to dispel the myths…and then what I have to say about it, critical or not!:

1.“FRANCE IS ON THE DECLINE”

France is the fifth largest economy in the world by GDP, and the second largest in Europe, with more than 65 million consumers. (IMF 2014, Eurostat 2014)
France has the second highest fertility rate in Europe (Eurostat, 2014), with a birth rate that has remained constant for 40 years, unlike in Germany, Italy, or Spain. (INED, 2014)

Comment: This is true, but while there’s lots on the good side, there’s some downside too. According to Index Mundi, France is the most visited country in the world and maintains the third largest income in the world from tourism. We like that, but France’s real GDP stagnated in 2012 and 2013. The unemployment rate (including overseas territories) increased from 7.8% in 2008 to 10.2% in 2013. The budget deficit rose sharply from 3.3% of GDP in 2008 to 7.5% of GDP in 2009 before improving to 4.1% of GDP in 2013, while France’s public debt rose from 68% of GDP to nearly 94% over the same period. There’s more if you want to read about it.

2.“THE FRENCH DON’T WORK HARD ENOUGH”

On average, employees in France work longer hours than in Germany: 44.3 hrs vs. 42.9 hrs for managers, and 36.2 hrs vs. 34.5 hrs for non-managers. (Eurostat, 2014). France is ranked sixth in the world for hourly labor productivity, ahead of Germany (7th) and the United Kingdom (13th). (The Conference Board, 2014)

Comment: True. Compare France with other European countries and they can look pretty industrious, but guess what? “Americans Work More Than Anyone” according to ABC News — more than anyone in the industrialized world. Check out this chart provided by the OECD.

Of course, we’re IDIOTS for working so much harder, especially if we’re not as productive! On the Conference Board Web site, productivity is defined as “the ratio of real output to total hours worked. Changes in productivity are approximately equal to the difference between the change in output and the change in hours worked.” According to the report and the charts (2012), France did experience a decrease in productivity.

 

3.“THE FRENCH JUST DON’T HAVE A WORD FOR ‘ENTREPRENEUR’…”

France is Europe’s number one country for newly founded businesses. (Eurostat, 2014 – data for 2011) In 2013, more than 538,000 new businesses were founded in France, of which nearly 275,000 were established under the ‘auto-entrepreneur’ business scheme. (INSEE, 2014)

Comment: True. The Auto-Entrepreneur system is great for the little guy having a shot at creating a new business. But as an “auto-entrepreneur,” you are penalized for doing too much business! Believe it or not, your level of business as an auto-entrepreneur is LIMITED to:

– 82,200 euros (excluding VAT) for a buy/sell activity (gross receipts)
– 32,900 euros (VAT) for services activity (gross receipts)

I have always found this unbelievable — that while one is encouraged to start a business, a cap is placed on just how much you should earn. And guess what most all auto-entrepreneurs do when they reach those limits? They don’t declare their revenues by dealing in cash. The system encourages a black market and deprives the country from important tax revenues.
 
4.“TOO LITTLE FLEXIBILITY IN FRANCE”

The Employment Act of June 14, 2013 passed in the wake of an agreement between employer federations and trade unions responds to the needs of companies to adjust output, while consolidating employment security and career paths. It builds upon renewed social dialogue within the corporate sphere, and demonstrates that France is capable of reform through negotiation.

Commment: I must admit, I don’t know what they’re talking about! In a report by Bloomberg, France “has 2.4 times as many companies with 49 employees as with 50. According to the French labor code, once a company has at least 50 employees inside France, management must create three worker councils, introduce profit sharing, and submit restructuring plans to the councils if the company decides to fire workers for economic reasons. Companies say the biggest obstacle to hiring is the 102-year-old Code du Travail, a 3,200-page rule book that dictates everything from job classifications to the ability to fire workers. Many of these rules kick in after a company’s French payroll creeps beyond 49.”

5.“THERE’S SO MUCH PAPERWORK IN FRANCE”

France is among the simplest countries in the G20 in which to found a company: only five administrative procedures and seven days are required, compared with a G20 average of 7.6 procedures and 22 days.(EY, European Attractiveness Survey, 2014) France is ranked first in Europe and fourth in the world for e-government. (E-Government survey, UN, 2014)

Comment: Obviously, they have never opened a business in the U.S. by comparison. When was the last time you went online, ordered up your own LLC, and started doing business with a telephone, a business card and your own wherewithal? Having opened businesses in both countries, I am here to tell you that NOTHING compares to the complexity of starting a business in France. Sorry guys, you lose on this one.

6.“FRENCH TAXES ARE SO HIGH”

KPMG’s Competitive Alternatives report (2014) compares effective corporate tax rates in 10 different countries:

France is ranked first for R&D services
France is ranked third for digital services
France is ranked fourth for manufacturing

Besides, the Government has taken measures to lower taxes on businesses.

Comment: I want proof. Social charges incurred by an employer for each employee is 83% of their salary compared to the U.S. 7.65%. However, yes, corporate tax rates in France are lower. France’s corporate tax rate is 33.3% compared to the U.S. 40%. The eastern European countries have as little as 10% corporate tax.

 

7.“FRANCE IS LAGGING BEHIND ON R&D AND INNOVATION”
 
France is ranked second in Europe and sixth in the world for the number of international patents filed. (WIPO, July 2013) For the fourth year running, France was once again ranked first in 2014 by the Deloitte “Technology Fast 500 EMEA,” with 86 of the top 500 fastest growth companies based on percentage revenue growth in Europe, the Middle East and Africa.

Comment: Sorry folks, in 2013, France created 16,886 patents compared to the U.S. with 571,612 and China has us all beat with 825,136, according to the WIPO (ipstats.wipo).

8.“FRANCE DOESN’T ATTRACT FOREIGN TALENT”

On average, 13 foreign company directors decide to invest in France every week. France is ranked third in the world for hosting foreign students. (Campus France, 2014). Nine students in 10 who come to France recommend the country as a study destination. (Campus France survey, 2013)

Comment: Of course it does, but while foreigners are coming here to study, their own French national students and youth are leaving France and going abroad to find work. Article after article will tell you this is true. The BBC claims claims that “More French people live in London than in Bordeaux, Nantes or Strasbourg and some now regard it as France’s sixth biggest city in terms of population.” Funny thing happening too…while the French youth are fleeing socialism, American youth are running towards it, according to Alysia Smiles in a political commentary posted in June of 2014.

9.“FRANCE HASN’T EMBRACED GLOBALIZATION”

France attracted 6,660 job-creating foreign investments between 2003 and 2013. (IFA 2013 Annual Report: Job-creating foreign investment in France). More than 20,000 foreign-owned companies do business in France, employing nearly 2 million people. (INSEE, 2014) Foreign investors account for 46.7 % of holdings in the market capitalization of CAC 40 companies. (Banque de France, 2014)

Comment: Hmmm…this is a tough one to criticize. Here’s a really good article about the topic: dealbook.nytimes.com/. But let’s not forget that being foreign owned provides an off-shore advantage to a company for tax and other reasons. Doing business in France has a certain “caché” for a company. It looks good on a letterhead when it says “New York, Paris, Tokyo.” Right? I kind of like it myself!

10.“FRANCE IS GREAT…FOR LUXURY GOODS AND CHEESE ONLY”

France has no fewer than 17 major groups – excluding these two business sectors – among the 200 largest in the world (Fortune Global 500, 2014); these groups are very diverse: from energy to construction to insurance. France is also ranked first in Europe in an index of the 100 most innovative organizations in the world that includes seven French companies or institutions. (Thomson Reuters, 2014)

Comment: France is great for lots of reasons, not just luxury goods and cheese! We all know that. If we didn’t, we wouldn’t be here, or reading this Nouvellettre®. I can think of lots of reasons of more importance…like art, culture, lifestyle, transportation, infra-structure, health care, education and more that the French government didn’t even think about in their article to prove attractiveness of France.

Every single day since moving here 20 years ago I wonder why I stay considering all the negative aspects to living in France…and every single day the answer is the same. Life here offers a much broader spectrum to life in general. There are luxuries one cannot describe or buy with lower taxes. There is a beauty and richness in the esthetics that other places simply don’t offer. It’s no wonder French luxury goods are so highly prized!…Or its cheese, or wine or cuisine.

So, while I think they had the right idea about dispelling the myths or “clichés,” they focused on the wrong ones. As you see, it was very easy to be critical of France…but then I ask myself, “why am I still here?”

A la prochaine…

Adrian Leeds

Editor, Parler Paris
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