French Unemployment Nears 16 Year High
Unemployment in France shot up by 43,000 in January. That brings the total number of unemployed to 3.16 million, just shy of the 3.19 million record set in 1997.
After he was elected, the administration of socialist President Francois Hollande decided to raise taxes rather than cut spending. Rates on the wealthy were raised to 75 percent, causing several wealthy individuals including Gerard Depardieu to flee the country. (The new tax policy was later declared unconstitutional.)
The result of choosing taxes over spending cuts was supposed to be an upswing in growth from the 0.0 France averaged in 2012 to a relatively booming 0.8 percent this year. But last week the EU issued its estimate of French growth for 2013 and said it would be in the 0.0-0.1% range this year.
Meanwhile, sounding a bit like President Obama, Hollande has refused to consider cuts to government spending for fear it would harm economic growth. France is literally counting on government excess to maintain its second consecutive year of 0% growth.