It is good to see that a leading US Economist gives a good vision of the French economy, everything is right, but some elements are, in my view, more important than others.

The "binding constraint" of France is its public expenditure ratio (the highest in the world), 57% of GDP. This is not as in UK or US a variable which can go up and down, it goes only up (ratchet effect). Once you give an advantage to an economic group, they will never accept this to be reduced, whatever the situation. Look at Air France pilotes, they have a status, they are overpaid by all standards and bring the company to collapse, they have a status (it means they cannot be fired), they go on,they say no to any reforms which will be against there pity interests. They dont care if AF got broke at the end.

Are you sure that to get the excellent health care provided in France we need to spend so much on health? It is frustrating to see that a lot of savings can be done in this sector without threatening care for the poor or health care for severely ill patients. Why is it necessary to reimburse at almost 100% physiotherapists, why is it il impossible to merge small hospitals nearby? Why is it necessary to reimburse sport accidents? Etc.

France is a country of vested interest reinforced by status and the actual President (as his predecessors) are afraid to remove these "avantages acquis" (vested interests).

The second thing the Keynesians dont understand is that to afford a growing expenditure ratio, you need to raise every year a little bit tax (deficit financing has a limit). When F. Hollande took over as President he raised tax on "the rich", they were already overtaxed, they left the country, result no investment, no growth, more unemployment. Therefore the first thing to do for the French Government is to give to the market (and especially to entrepreneurs (which used to be a French word) the strong signal that the Government is serious about reducing tax and principally the tax wedge which is one of the major cause of unemployment. The socialist Government has not reduced by one euro public expenditure, it has reduced the growth rate, this is not the same thing.

Therefore there is a French economic decline (vis à vis Germany and UK), yes "France punches far below its weight economically" and it will be punching also below its weight politically, both are interlinked and Marx was right (on this point) when he wrote that the economy determines the politic, not the other way around.

To consider the existence of eurozone as a transfer union is, in my view, wishful thinking. First it has to be shown that US is a perfect transfer union between states, states with surplus transfer to states in deficit. Second before putting the horse before the cart why not respect the Maastricht rule, to have a public debt ratio below 60 (or 70%) of GDP. A monetary union cannot function if all member states have a debt ratio above 100% of GDP. Deficit cannot be monetized by the ECB as it could be the case in country with their own CB.

French official idea consist to think that they can impose other European countries to adopt their social model, with their tax system, since the French model is not sustainable, it will be difficult to convince more pragmatic countries to follow.

The only think to do for France is to face reality, reduce the number of civil servants, reduce health expenditure maintaining public service for people very sick and the poor, ask other to start to pay for small diseases, control and reduce the expansion of local government spending which is basically used to hire more civil servants.

People with a right to work (civil servants) dont accept reforms to make more flexible the economy (reduction of taxes based on the salary, reduction of the minimum wage, authorization to work for all foreigners, authorization to work on sunday, authorization to work for people who want, nothing else). The 35 hours a week is a Malthusian law.

As you rightly say the French social model is so expensive that it cannot be applied to new comers. Either France take seriously reforms or accept the consequence of a long and unavoidable decline.