France: Five things you may not know about me France: Five things you may not know about me France: Five things you may not know about me

France: Five things you may not know about me

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 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 is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Inspiration Disclaimer and (v) Notices applying to Trade Inspiration, 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 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 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 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 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 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 (

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. Saxo Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Markets or its affiliates.

Saxo Markets
88 Market Street
CapitaSpring #31-01
Singapore 048948

Contact Saxo

Select region


Saxo Capital Markets Pte Ltd ('Saxo Markets') is a company authorised and regulated by the Monetary Authority of Singapore (MAS) [Co. Reg. No.: 200601141M ] and is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms & Risk Warning to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products such as Margin FX products may result in your losses exceeding your initial deposits. Saxo Markets does not provide financial advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Markets does not take into account an individual’s needs, objectives or financial situation.

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website are not intended for residents of the United States, Malaysia and Japan. Please click here to view our full disclaimer.

This advertisement has not been reviewed by the Monetary Authority of Singapore.

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.