WSJ advice for France: reform ASAP!

"The contrasting experiences of New Zealand and France, two countries on either end of the world but with more or less similar income and age demographics, warn us against the monolithic idea that advanced-country economies are all destined for the same bland future due to their high debt levels and aging populations. The Reserve Bank of New Zealand earlier today made its third rate hike in this cycle, making New Zealand the  leading advanced nation and G10 currency member to move into the tightening cycle. By contrast, if France had its own central bank, it would be embarking on an aggressive quantitative-easing program a la the Bank of Japan right now. The latest French consumer-price data showed no change on the month with annual inflation running at just 0.7%. This follows a drumbeat of weak manufacturing and business activity data out of France. Why the difference? Well, New Zealand has a reputation as one of the most transparent economies with the least bureaucracy and most competitive tax and regulation policies in the world; France, not so. (New Zealand also enjoys strong demand from Asia for its agricultural exports, a commodity sector that’s less prone to fallout from the Chinese economic slowdown than, say, Australia’s mining exports.) All up, the Kiwis-versus-Frenchmen contrast offers a reminder that microeconomic conditions can have as much of an influence on economic fortunes as wider macroeconomic and global trends and that the policies that create those conditions can be as important, if not more, than the macro policies of central banks. (MC)

FRANCE: May consumer price index unchanged on the month and up 0.7% on the year against expectations of up 0.1% and up 0.7% respectively.

French inflation has been low enough, and the economy weak enough, that deflation fears are reasonable. The latest European Central Bank measures are likely to help, but there remains considerable need for structural change in the economy as well. (AM)"

Nothing has been done since several years in the direction of structural changes. We will pay a high price for this lack of reform.