A-Franco-German-Tale

Table 1: Growth rates: Labour productivity and employment1964–2012 1999–2012 1995–2004 2005–2008 2007–2012Mean Std. Dev. Mean Std. Dev. Mean Std. Dev. Mean Std. Dev. Mean Std. Dev.Productivitiy FR 2.45% 1.81% 0.77% 0.96% 1.25% 0.82% 0.67% 0.82% 0.46% 1.17%Productivitiy DE 2.02% 1.83% 0.75% 1.84% 1.05% 0.45% 1.04% 1.27% 0.34% 2.79%Difference FR-DE 0.44% -0.02% 0.02% -0.88% 0.20% 0.37% -0.36% -0.45% 0.12% -1.62%Employement FR 0.57% 0.76% 0.77% 0.96% 1.10% 0.87% 0.92% 0.41% 0.31% 0.84%Employement DE 0.47% 1.20% 0.56% 0.82% 0.36% 0.85% 0.83% 0.80% 0.85% 0.63%Difference FR-DE 0.10% -0.44% 0.21% 0.14% 0.74% 0.02% 0.10% -0.39% -0.54% 0.21%Growth FR 3.03% 2.57% 1.54% 1.92% 2.34% 1.70% 1.60% 1.23% 0.77% 2.01%Growth DE 2.49% 3.03% 1.31% 2.66% 1.40% 1.30% 1.86% 2.07% 1.20% 3.42%Difference FR-DE 0.54% -0.46% 0.23% -0.74% 0.94% 0.39% -0.26% -0.84% -0.42% -1.41%Figure 4: New jobs created since 1999 in thousandsSource: AMECO15,00010,0005,0000ItalyFranceSpainGermany2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010FinlandSlovakiaSloveniaPortugalAustriaNetherlandsLuxembourgCyprusItalyFranceSpainGreeceIrelandEstoniaGermanyBelgiumble 1. It has been argued that Germany has undertaken structural reforms because it isanticipating unfavourable demographic trends. Yet, German labour market reforms havelowered productivity growth, and there is nothing that shields better against the burdenof an aging population than greater productivity. The higher productivity may also justifyto some degree, why France may be more generous about retirement age. Nevertheless,employment is the foundation of social and political stability and job creation must thereforehave priority.JobsThe advent of European monetary union was the largest job creation program in Europe’shistory and France has benefitted generously. By 2008, the Euro Area had created17.463 million new jobs, of which 3.5 mn were lost again during the financial crisis(i.e. by 2012). As Figure 4 shows, with a net balance of 3.719 million newly created jobsover the period 1999-2012 France was the second largest job creator in the Euro Area,Economic growth and employmentp. 8