French President François Hollande will meet with the press on Tuesday afternoon at a time that is politically and personally troubled for him, and uninspiring for France’s economy.
Despite the slew of positive data the euro zone has enjoyed in the past few months, the French economy remains depressed. French manufacturing output, for instance, contracted once again in December, when its manufacturing PMI (Purchasing Managers’ Index) slipped to a seven-month low of 47.0. Meanwhile, manufacturing output in the majority of euro zone –Spain and Italy included –expanded. Even Greece fared better than France, with a 49.6 reading.
In order to haul itself out of its economic doldrums, France needs deep structural reforms — a piece of advice that analysts have reiterated for months, and that appears to have reached the ears of the president.
Indeed, Hollande surprised some in his televised New Year’s address by advocating a “Responsibility Pact” in which labor costs would be reduced in exchange for job creation. He admitted taxes had “become too heavy” and pledged to reduce public spending, alluding to possible cuts to the sacrosanct social welfare system, a first for a socialist president.
So many are waiting for his press conference, the third of the kind since his elections in May 2012, with bated breath, hoping for more direction on the form reforms might take.