Credit Impulse Update: France’s best days are already behind us Credit Impulse Update: France’s best days are already behind us Credit Impulse Update: France’s best days are already behind us

France: Five things you may not know about me

Picture of Christopher Dembik
Christopher Dembik

Head of Macroeconomic Research

Summary:  Here's my short list of positive things you may not know about France.

In today’s morning note, I want to focus on something a bit different than the impact of the coronavirus. My colleagues and I have largely covered the topic over the past few days. There has been quite a long time I wanted to write about the positive aspects of the French economy and what have changed in recent years. During my frequent business travels in Europe and in MENA region, I noticed that clients have too often a wrong image of France. With this in mind, here’s my short list of positive things you may not know about France:

Investing in the French stock market is basically investing on luxury. There is no trick to invest successfully on the CAC 40 index. Since the GFC, the French benchmark has entered into a new cycle dominated by luxury stocks (1/3 of the total capitalization) which have replaced financial stocks (about 11% of total capitalization nowadays) as main driver of growth. The following five stocks explain roughly 70% of the increase of the CAC 40 index since 2015: LVMH, Kering, Hermes, L’Oréal and Airbus.

Macron’s pension reform will be fairer. It is far to be perfect, but it is moving in the right direction. Macron’s left-wing inspired reform will reduce inequalities between highest and lowest pensions and, at the same time, it will push to work longer in order to have full retirement benefit. According to the impact report on pension published by the Council of State (which is based on various scenarios), one of the main advantages of the reform will be that pensions will grow on average by 29% for the poorest while pensions will only increase on average by 1% for the wealthiest.

The labor market is showing great signs of improvement. The best indicator to track is the share of CDI (open-ended contracts) in new hiring. It is currently standing close to its highest level since Q1 2001, at 49.2%. Looking by company size, the most impressive trend concerns new hiring by small companies (0 to 19 employees). The share of CDI is at 51%, confirming the labor market is finally on the right path!

Debt does not really matter. Public debt has increased by 39 billion euros in the third quarter of 2019, which represents roughly 50% of the total amount collected on income tax revenue. However, this is no time to panic. The debt is only a problem if debt service is unmanageable, which is clearly not the case for France. Net government interest payments are only about 1.1% of GDP, which is slightly more than Germany (0.4% of GDP) and less than the average amount paid by the OECD countries (1.7% of GDP).

Everything is always about politics. In France, the economic cycle is often influenced by the political agenda. In 2019, business failures decreased by 4.2% and this great news is mostly due to the positive performance of the construction sector. Guess what? Construction spending increased in many cities ahead of the municipal elections that will take place in March.



The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
Notification on Non-Independent Investment Research (
Full disclaimer (
Full disclaimer (

Saxo Bank A/S (Headquarters)
Philip Heymans Alle 15

Contact Saxo

Select region


Trade responsibly
All trading carries risk. Read more. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more

This website can be accessed worldwide however the information on the website is related to Saxo Bank A/S and is not specific to any entity of Saxo Bank Group. All clients will directly engage with Saxo Bank A/S and all client agreements will be entered into with Saxo Bank A/S and thus governed by Danish Law.

Apple and the Apple logo are trademarks of Apple Inc, registered in the US and other countries and regions. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.