France must increase competitiveness, says WTO head

The head of the World Trade Organisation has delivered a hard-hitting critique of France, saying the country has lost its bearings and needs profound reform to increase its competitiveness.

Pascal Lamy, a Frenchman, said his country needed to stop thinking it was "an island of temporary happiness in a world of catastrophes".

"This is not a good approach. We cannot deduce from it that if France has problems it's the world that must change."

Lamy, a former European commissioner and supporter of the Socialist president, François Hollande, saved his harshest criticism for Arnaud Montebourg, the minister for industrial regeneration, whom he lambasted for blaming the Chinese for France's economic woes.

"If there is an example of a GPS that has a few problems, in my opinion it's him," he said in an interview with French radio and television. "I don't think he has the right figures in his head. When you look at the French economy the problem is not, as he says, competition from the Chinese. That's wrong. They may be paid five times less than the French but they are five times less productive.

"France's GPS is a little wonky. The world is hard and experiencing extremely rapid globalisation and there are those doing well. I think France has a lot of advantages but she doesn't see them, doesn't recognise them. We are world champions in pessimism."

Last October Montebourg declared that the WTO's "global free-market record is a disaster".

In his riposte, Lamy, 65, who retires from his job as WTO director general at the end of August, told RMC Info and BRMTV: "France has an unemployment problem; the solution is greater growth, and the solution to greater growth is competitiveness."

He dismissed rumours of a government job in the autumn as "exactly that, rumours", and said he was not calling for greater austerity to reduce public spending but for "doing things differently".

"There is no doubt France is doing less well than many other countries in terms of competitiveness," he said.

"I don't believe we need more austerity, we just have to do things differently; find a more efficient way of doing things that brings better results. It's doable, but there has to be a vision, a desire to do them, and the problem is that the French don't want to do them because they cannot see what it will bring them."

March 1, 2013

Source: Guardian UK