On Thursday, March 26th, we enjoyed a convivial reception at the World Affairs Council of Northern California. We listened to Pierre-François Mourier, Consul General of France in San Francisco, who explained to the young French-speaking audience why France can resist the crisis.

According to a study by the German IW Institute in Koln, France is expected to become the Europe’s fastest growing economy by 2035 thanks to a dynamic natural population growth. Indeed, it is the primary driver of population growth in the European Union, and is on its way to become the EU’s most populous nation.

In terms of global investment, France is the third greatest recipient of Foreign Direct Investment (FDI) in the world, and the first among all OECD countries. Its central location and efficient transportation network – including high-speed rails and freeways – make it a privileged location to enter the European market. In addition, France is the world’s first tourism destination, the EU’s leading agricultural producer and exporter, and the most energy independent Western country.

France’s standing as a cultural paragon supplements these competitive assets. According to Pierre-François Mourier – former advisor for culture and education to Jacques Chirac – culture has a special role to play in periods of crisis and pessimism. Indeed, 2008 was a record year for museums and theaters, with such popular exhibitions as Jeff Koons at the Château de Versailles, and Picasso and the Masters at the Grand Palais.

In contrast to the common assumption that France is state-dominated, French capitalism is strong. Thirty-nine of the world’s most powerful firms are French, and 60% of the companies listed under the Paris stock exchange are family controlled. While this implies more long-term and sustainable management, global recession and mass lay-offs have weakened household confidence. Nevertheless, consumption is backed by strong savings rate: French households save about 15% of their disposable income, contrary to 3% in the US. Pierre-François Mourier added that the country’s social spending represents a critical “shock absorber” in crisis times.

“Family capitalism is a non-financial answer to the crisis” concluded the Consul General. Even if France lacks motivation and self-confidence, the fifth largest economy in the world still has strong assets: With only 1% of the world’s population, it creates 4% of the global economic growth.

Written by Pierre Letoublon