If you were born in France between the 1980s and 2010, Germany must conjure up two images for you: Seville 1982, where the German football team beat the slightly too romantic French in the semi-final of the World Cup, and the famous “German model” in economics. For a long time, Berlin embodied the European locomotive, the only good student from the Old Continent who knew how to maintain the enthusiasm of youth in terms of growth.
But over time, even great myths crumble. For several years, in football, France has dominated its neighbor. And would be on the verge of doing the same in terms of the economy, according to the German weekly Der Spiegel. In September, the latter delivered a column with the explicit title: “France is Germany but better! “. Since we are a bit chauvinistic (a bit), we decided to prove that Der Spiegel is right: here are five economic indicators where France is strongest.
The growth
To all lords, all honor, let’s start with the word-count-triple, the goal outside the surface which ends in the top corner, the strike in bowling: GROWTH. France has enjoyed growth twice as fast as Germany for five years, excluding 2020 during the pandemic, where Paris had its feet in the carpet much more than Berlin. But even with the pangolin, over the entire period 2018-2023, French growth reached 5.5% when that of Germany capped at 2.5%, according to the World Bank. Come on, in the rearview mirror the Germans.
Production costs
According to the Boston Consulting Group, in 2022, a French product was cheaper to produce than a German product, if we take into account all wage, energy and transport costs. More precisely, a product manufactured in France and exported to the United States is 15% more expensive compared to production directly at Uncle Sam’s, when it is 20% more expensive for a German product.
A significant advantage in the war between countries to have the best competitiveness. In 2019, during the latest assessment by the Boston Consulting Group, Germany was ahead of France.
Attractiveness for foreign investments
For the fourth year in a row, France leads Europe in welcoming foreign investments. In 2022, 1,259 FDI (foreign direct investment) were born in France, according to the audit and consulting firm EY, compared to 832 in Germany, the third European country. And so as not to shy away from our pleasure, we therefore surpass not one, but two neighbors hated by sport, since it is the United Kingdom which appears in second position with 929 FDI.
The number of economic champions
Another national pride, France remains the country in Europe with the most places in the coveted Top 100 of the most valuable global companies (read: the best valued on the stock market). In the latest ranking from the EY firm, in December 2022, France places five: LVMH (15th), L’Oréal (49th), Hermès (58th), TotalEnergies (62nd) and Christian Dior (84th). The success of luxury, one of the industries that has bounced back best during and after Covid, explains this French domination. Meanwhile, no German companies make the top 100 (these big losers), the best valued being the software publisher SAP, valued at $121 billion, barely 106th.
inflation
So yes, the disgruntled will say that currently, inflation is slightly lower in Germany (3.2% over one year) than in France (3.4%). But taking the whole crisis “very angry runaway prices” since the war in Ukraine, France will have suffered much less than its neighbor across the Rhine.
In total, over 2023, the two countries should suffer the same blow to the cash register, since the Bank of France and the Kiel institute predict annual inflation of 5.8%. But in 2022, at the height of the crisis, France experienced a price increase of “only” 5.2%, compared to 6.9% for Germany.
Obviously, in our selection, we will have deliberately forgotten to talk about the unemployment rate, the GDP, the debt or the trade balance… Let’s face it: the French economy remains generally inferior to that of our neighbor. On the other hand, in football, objectively speaking, we are much better. It’s already that.