Paul Krugman: No Reason to Fret About France

First things first: France has problems. Unemployment is high, especially among young people; many small businesses are struggling; the population is aging (although not nearly as much as it is in many other countries, Germany very much included.) By just about any measure I can find, however, France looks not too bad by European standards. Gross domestic product has recovered roughly to precrisis levels; the budget deficit is fairly small and the medium-term debt outlook not at all scary; the long-term budget outlook is actually pretty good compared to France's neighbors, thanks to a higher birth rate.

Yet the country is the subject of vituperative, over-the-top commentary. Last year The Economist was declaring that France was "the time bomb at the heart of Europe." Earlier this year, Shawn Tully, an editor at CNNMoney, wrote that that France was in "free fall." The latter actually offered a few specifics, arguing that France faces a "yawning competitiveness gap" due to rising labor costs. Hmm.