France spirals down EU wealth list towards ‘third-world status’
The French were founders of the European Union and for decades, they were among its wealthiest citizens. They looked down upon poorer peoples such as the Cypriots and the Italians, and considered the Germans their economic equals.
Today, however, France is in the EU’s second division. For the third year running, its national wealth per head is below the bloc’s average — and indeed below that of Cyprus, according to figures from Eurostat, the statistics office.
The French are falling behind the north Europeans and are being caught up by those in the east. According to the Organisation for Economic Co-operation and Development, the Poles will be richer than them within ten years.
While small countries such as Luxembourg and Ireland have a gross domestic product (GDP) per capita that is more than double the European average, if that average is set at 100 then Germany, the bloc’s biggest economy, is ranked at 116, the UK is 99 and France is 98, according to Eurostat’s figures for 2024, the latest available.
As for the Italians, who were 10.1 per cent poorer than the French in 2020, they are now on almost exactly the same footing, a separate study by the European Commission has found. The GDP per capita at purchasing power parity — a measure of income per person accounting for currency differences — is $59,453 in Italy and $59,683 in France.
• The Times view: Macron’s new budget offers few solutions to France’s malaise
The figures are all the more striking because the EU as a whole is falling ever further behind the US in terms of economic clout, analysts say. They have provoked an outpouring of despair from commentators, particularly those on the right.
France finally passed its budget on Monday
Take, for example, Nicolas Baverez, a prominent essayist and former senior civil servant. Writing in Le Figaro, he said: “Our country has become the Argentina of Europe. France is shut in an infernal spiral that is leading it to third-world status.”
The 2026 budget that parliament approved on Monday does not fill Baverez and other critics with hope of a better future. They say it is made of the ingredients responsible for France’s recent failures: a mixture of high taxes, even higher public expenditure and a growing debt to bridge the gap between the two.
Frédéric Douet, a law professor at Rouen-Normandie University, said Sébastien Lecornu, the prime minister, was repeating the mistakes of the past.
“The slow pauperisation of France is a consequence of policies that are as costly as they are inefficient,” he wrote in Le Figaro. “The mantra of our technocrats and politicians is that tax rises resolve our problems.”
Lecornu, 39, has admitted that his budget is “imperfect” but said the country was lucky to have one at all. In the absence of a majority in the National Assembly — a result of Emmanuel Macron’s ill-fated decision to call snap parliamentary elections in 2024 — his two predecessors were ousted while trying to pass a budget.
France’s prime minister, Sébastien Lecornu
THOMAS SAMSON/AFP
The uncharismatic and low-profile Lecornu almost disappeared even more quickly. He resigned in October a month after being named prime minister by Macron amid cabinet turmoil, only to be appointed again a week later in one of the more bizarre episodes of the political crisis in which the country is trapped. The centrist admitted that he was at the head of the weakest government France had had for decades. He set out to save his job by reaching a deal with Socialist Party MPs.
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When the Socialists were last in power between 2012 and 2017, they took the country on a great leap backwards, according to Mathieu Plane, deputy director of the French Observatory of Economic Cycles. He said the supply-side economics put in place during the presidency of François Hollande had coincided with one of the two main periods of the modern French decline — the other being the pandemic, when Macron spent more than other EU countries but with less impact on subsequent growth or prosperity, according to Plane.
The former German chancellor Angela Merkel with Hollande in 2015
ETIENNE LAURENT/EPA
The Socialist Party demanded a repeat of the policies that the economist said had failed ten years ago, and Lecornu agreed. Jettisoning key planks of Macron’s pro-business agenda, he suspended a flagship reform of the state pension system, added €6.5 billion to the tax bill of wealthy families and €7.3 billion to that of big companies.
On the other hand, there was a €50-a-month rise in welfare for low-paid workers, €1 canteen meals offered for students and a €400 million increase in social housing subsidies.
Public expenditure, already among the highest of any developed country in terms of its share of national wealth, at more than €1.7 trillion, is set to rise by €38 billion this year. Tax revenues will represent 43.9 per cent of national wealth, up from 43.6 per cent the previous year.
Lecornu at a debate before votes on two confidence motions against the French government
BENOIT TESSIER/REUTERS
The government had initially hoped to reduce the public deficit from 5.4 per cent of national wealth last year — the third highest in the EU — to 4.7 per cent in 2026, and it had planned to do so largely through spending cuts. Its new aim is a deficit of 5 per cent this year –– still an optimistic goal, according to many economists –– and the plan is to achieve it mostly through tax rises. Meanwhile, the national debt of €3.4 trillion is expected to rise even higher.
Riot police clash with protesters during a demonstration against labour reforms
FRANCOIS MORI/AP
There is little in the budget to encourage the French to work more, although many economists say the country is handicapped by its tendency to enter the labour market later than its neighbours, exit earlier and put in shorter hours in between.
Prisca Thevenot, an MP within the Macron centrist camp and a former government spokeswoman, said: “The Socialist Party got its dream budget.”
Jordan Bardella, chairman of the populist-right National Rally, said the budget was “dripping in new taxes” and contended that Olivier Faure, the Socialists’ first secretary, was the de facto prime minister.
Meanwhile, the moderate-left could hardly contain its delight. One Socialist MP said: “I don’t think [Lecornu] imagined giving away so much when he started negotiating with us.”
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Macron’s team has vaunted the “stability” that it said the budget would bring to families and businesses. But Carine Camby, the interim chairwoman of the Court of Accounts, said France needed change, not the status quo.
“It is urgent to act vigorously to reduce our deficit, to control our expenditure and to stabilise our public debt,” she said.
Le Monde retorted: “That certainly will not be the case in 2026.”
With a presidential election looming next year, the government’s limited room for manoeuvre is likely to be squeezed further, according to commentators. France Info, the state radio, said Lecornu was planning little other than emergency subsidies for farmers and a bill to authorise assisted dying, which is by no means certain to win parliamentary approval. It said he had given up hope of implementing the sort of economic reform that the likes of Camby say is necessary.
For years, France could at least take comfort in its birthrate, which was notably higher than the EU average. However, last year there were more deaths than births for the first time since the Second World War. The population grew but only because of immigration.
It is not only in Paris that the outlook is causing gloom. In an editorial, Le Télégramme, the regional daily in Brittany, said courage would be needed to overcome the country’s difficulties. It noted that little of this was in evidence among the political class.
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