French competitiveness decline halted but not reversed: #Villeroy

France has halted a long decline in its international competitiveness but still needs to do more to claw back lost ground, Bank of France governor Francois Villeroy de Galhau (pictured) said this week, writes Leigh Thomas.

“French exporters need to improve their positioning, (and) increase their numbers,” Villeroy said as he presented the central bank’s annual report on the balance of payments.

But ultimately firms needed workers with the right skills to make better products, making the success of a government reform of apprenticeships and vocational training all the more critical, he said.

A growing number of French firms say that they can not find enough skilled labor to meet clients’ order, holding back a broader economic recovery under way.

France trimmed its current account deficit last year to €13.1 billion ($16.14bn) from €16.7bn the previous year as higher tourism revenues helped offset a bigger energy bill, according to the balance of payments report.

France has run a current account deficit every year since 2006 as its competitiveness waned. While it has not further deteriorated in recent years, the deficit has not been significantly reduced either.

“It’s like our overall competitiveness is marking time. We haven’t been able to get beyond stabilization,” Villeroy said.

The central bank estimates that foreign trade will cease to be a drag on the economy in the coming years, although it will not become a motor either as in other eurozone countries like German, Italy or Spain.

France saw its best year for foreign direct investment in a decade last year with €44bn, up from €32bn in 2016.

($1 = €0.8116)

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