Comments by the French President definitely don’t correspond to the feeling of French people, according to poll opinions. Skepticism after his TV interview and growing discontent are reflected by very unfavorable vote intentions for the left, in the prospect of the 2017 election. Definitely, poll opinions are frequently wrong a year before the term but the magnitude of the rejection is, this time, without precedent.

So, how France is doing? Last week results show that the quasi stagnation we endure since 2012 has been replaced by a shy rebound. And it is not strong enough to produce a significant impact on unemployment, the only criteria able to change French people perception of the situation. More, this rebound is not the consequence of the economic policy, which is still concentrating its action on wrong objectives. First quarter growth estimations will be published at the end of the month and they are unlikely to give a significant signal, able to convince economic agents that a real upturn is on the way.

Foreign trade results for the previous six months are disappointing since government policy had put the priority on the improvement of the competitiveness of the French economy. We must admit that the foreign exchanges contribution to the growth has been negative during that period and that it is likely this situation has continued during the first quarter of 2016. February figures are especially worrying with a deficit above 5 billions, despite the fact that imported fossil fuels prices recorded a new and substantial fall and that the weakness of the euro against the dollar should have, at last, stimulated our exports. These are stagnant when our manufactured products imports are strongly increasing, the car industry deficit reaching a record high. French carmakers are painfully keeping their market shares but the consequences of their delocalization policies, lead by Renault during the last 15 years, are heavy.

What is more concerning, is that the improvement of companies profit margins, did not produce, as the government was expecting, a rebound of their investments, which recovered only  in 2015 the level reached in 2011, in despite of  interest rates falling at historically low levels. They chose to reduce their debts or to increase their dividends with tax credits given by the State through the CICE and the reduction of their costs following the fall of raw materials prices. We see also a perverse impact of ECB monetary policy. With near-zero interest rates, fund managers are more and more interested by acquiring shares if they offer substantial dividends to provide to their customers better returns. So the CEOs are more and more inclined to fulfill this new choice, in developing buy-backs, which have a positive impact on their share price and, incidentally, improve their own remuneration since a portion of their packages includes frequently company shares. Margin improvement, instead of stimulating investment, is used to increase the remuneration of the top management and the return in favour of shareholders. That was not its purpose.

Households, who have accumulated a considerable saving during last years, are still doing so. Their financial saving rate reached a record high during 2015 last quarter. They are starting to consider the acquisition of their home in order to take advantage of very low long term interest rates and of the tough competition among banks which hope, through offering loans, to increase their client loyalty or to acquire new ones.  It is maybe the only real positive signal which emerges from the French economy since the beginning of the year. Housing starts and delivered construction permits, which are a good advanced indicator, are on the rise for the first time since five years.

On the opposite, public investments are falling. The end of several big projects as the pressure on public finances and local authorities restrictions on expenditures have provoked a 2% diminution of their volume in 2015 and the situation has no chance to improve in 2016. Last negative factor, growth figures in the second half of 2015 were inflated by companies and even households inventories increase. The last ones bought their domestic fuel earlier, being afraid by a possible price rise. These phenomenon could be reversed in 2016 and impact growth results.

The key figure, both for the French people, it is understandable, and for the President of the Republic who said that it will be criteria of the success of his mandate, is the level of unemployment. Monthly results are, by nature, volatile. And even if, some months, the number of unemployed people seeking a job has decreased, and may decrease again, in some other months, it will by highly unlikely, that on an annual basis, there is a significant reduction. And even, if it was the case, the political argument should be utilized very cautiously because the opposition will definitely explain that, during the 2012-2017 period, the number of unemployed persons increased by more than 600 000 and that is difficult to consider it is a success.

The analysis of the evolution of the number of salaried employees is more reassuring: it increased by roughly 60 000 units during last year, filling one third of the fall observed since 2012 spring. It was too low, by far, to stop the rising of unemployment due to the demographic balance, evaluated around 150 000 persons each year, between people retiring and the young arriving on the job market. This explains the rise of the number of jobseekers in France. On the opposite, in Germany, the balance is negative, with a deficit of 100 000 people each year, which explains why the unemployment rate in the country is very low. But the main lesson about the job market situation in France is that without growth, the reduction of unemployment is not possible.

Unfortunately, the policy focused on competitiveness and devaluation followed during the last four years, and we see it through the foreign trade and the investment figures, has not delivered the expected results since these two components of the economy have played a rather negative role. If we want France to do really better and to have, at last, an impact on the job market, it will be necessary to activate other tools, including the household purchasing power and public investment. They are qualified as “pre-election gifts”; it may be true and their major fault is to be too late. The significant and durable reduction of the cost of the public debt (4.4 billions announced by the government compared with the initial evaluation in the 2016 Finance bill) opens some freedom of action. Very low interest rates provide with many opportunities to finance projects which could be useful and generate jobs. Why don’t we profit of that situation?

Time is short. International environment is much more favorable than it is usually said. The Chinese krach did not occur. Financial markets have stabilized. To give an impulse to the French economy and to permit it to regain its dynamism, new choices must be done. It is now or never for the government.