In France, an Economic Bullet Goes Unbitten

Most European politicians recognize the grim truth – that economic reform is necessary for global competition and that youth cannot expect the many benefits now enjoyed by elders. Generous retirement and other social benefits correlate with high unemployment among youth. Corporate executives have suggested that politicians must make the difficult decisions that lead to economic reform, likely leading to voter dissatisfaction and rapid turnover in governments. But politicians and voters alike in countries like Italy and France balk at reforms, as evidenced by France President Jacques Chirac revoking a law aimed to increase youth employment, including among young Arabs, by making it easier for companies to hire or fire anyone under age 26. Recognizing the need for reform and worried about future benefits, citizens of France have higher savings rates and buy fewer consumer goods. Delaying economic reform leads to increasing inequality between young and old, as well as apprehension about an uncertain future. – YaleGlobal