Economic crisis: a French malady?
For several years now, all economic barometers have pointed to a slump in business, with the lowest level reached in 2021, when the health crisis was in full swing. Now, it is the anger of farmers that is rumbling across the country, protesting against the free trade agreement with South American countries.
Angry, farmers are ready for a long protest movement. They believe they have been duped by the Attal and Bayrou governments, which are going to sacrifice our agricultural model.
The current industrial crisis could lead to a terrible domino effect and a dangerous drop of France in the European and world economy.
The industrial sector in jeopardy
Not to mention the crisis in the industrial sector. Thus, VENCOREX, a subcontractor of Arkema in Isère, faces an uncertain fate that demonstrates the existential threat to the entire French chemical sector. In addition, Michelin has also announced the closure of the factory in Cholet (955 employees).
In total, 1,250 employees would be affected. This would be the 6th factory closure by Michelin in France in 20 years. As bad news never comes alone, Arcelor Mittal is also considering the closure of two sites in Reims and Denain, representing the loss of 200 employees.
A decision made in response to a tense economic situation in automotive production and the metallurgical industry. What is certain is that the French illness is not creating wealth, but rather a scramble between cities, regions, and departments fighting over the rare business creations!
Mass retail affected
What is more serious is that even mass retail is affected, with the announcement of major redundancy plans. After the collapse of the Casino group, it is Auchan - Mulliez, a supermarket chain worth 28 billion €, that is going to leave 2,400 employees in the lurch.
Its holding company announced a net loss of nearly one billion € over the first six months of 2024. Its structural weakness lies in its model, which is no longer relevant today. Indeed, Casino is built like Carrefour on a comprehensive model, whereas the hypermarkets of Édouard Leclerc rely on independent businesses, allowing stores to be more competitive in retail prices.
In reality, only one question arises. Has globalization gone too far? As a reminder, this result is the major consequence of the creation of the Organisation Mondiale du Commerce (OMC) in 1995. Under the impulse of the OMC for 30 years, France (and Western countries) acted for trade liberalization.
The OMC was the successor to the GATT, a temporary agreement, adopted in 1947, on tariffs and trade. The OMC had to face many challenges related to changes in the global economy and the geopolitical context. Unfortunately, the members of the OMC failed to agree on new rules regarding agricultural and industrial products, highlighting conflicting interests between developing and developed countries.
The institutional system has collapsed. The OMC is no longer listened to, fortunately, but the damage is done. In response, a new institution was born with 32 countries under the name of BRICS, representing half of the world's population.
Bernard Bertucco Van Damme