Paris is starting to recover its joie de vivre as France climbs out of recession, writes Nick Hood.
Parisians have much to celebrate these autumnal days: the Eiffel Tower is 120 years old, Asterix the Gaul is (paradoxically) only 50 and the Michelin-starred Tour D’Argent is auctioning off 18,000 bottles from its legendary wine cellar. Some lucky and non-recession-scarred bidders will be marking France’s escape from the global recession with a long-forgotten bottle of 1875 Armagnac Vieux.
But elsewhere, little changes. Three of France’s largest rail workers’ unions called a strike recently. Seeking to hide behind the green lobby, the cause was not workers’ salaries, but the failure of Le Petit Président’s government to encourage freight transportation by chemin de fer. Newspapers reported that the trains continued to run with minimal disruption, unlike the self-destructive mayhem wrought in the UK by striking postal workers. French farmers were also protesting (when are they not?) burning tyres in the Champs Elysées and demonstrating right across France, demanding action over plummeting prices.
But France does seems to be charting a cautious and steady course out of financial darkness, all the same. Along with Germany and Japan, it returned to growth in the second quarter of 2009, and is forecasting a modest 2.2% GDP contraction for the whole of 2009. Jobs are still being lost and the unemployment rate in mainland France has reached 9.7%, but industrial orders rose 3% in August. Household consumption was also 2.3% higher in September than in August, although consumers are expected to remain prudent, fearful for their jobs.
The factors underlying these positive indicators are stronger exports to emerging markets and the cash-for-clunkers scheme. Despite this, business investment remains low and funding conditions are challenging for companies wanting to expand. Production capacity remains underused across a broad range of sectors.
Unfortunately, the business-restructuring regime in France has morphed during the recession, becoming more a protective environment for cash-strapped companies, rather than fulfilling its original brief of forcing troubled entrepreneurs into debt talks with their lenders. Complaints are growing from lenders and advisors that this unintended shift of emphasis is both restraining lending for rescues, and changing the funding environment for healthy businesses.
There have of course been high profile casualties. In June, the iconic fashion house Christian Lacroix, famous for its brightly-coloured gowns, declared itself insolvent. Vodka maker Belvedere, known for its Sobieski brand and boasting Hollywood actor Bruce Willis as a shareholder, has entered the French 'sauvegarde' insolvency regime. A major struggle is under way to rescue the huge property empire of the Orco group, extending beyond France into Poland and elsewhere in Eastern Europe.
How are the legions of excellent Paris restaurants faring in this early recovery phase? They seem busy, but it was a sign of the times that it was possible to book a table for 14 on a Thursday evening at the illustrious Maceo establishment, with its magnificent L’Empire architecture and wide choice of magnums of fine French wines, at no more than three hours' notice.
Things may be getting better in France, but a return to full health may be some way off yet.
