France's failure to recognize that its problems do not stem from the world but from within its own borders, is at the crux of a long-standing decline, according to Lamy. And reforms, whether from this government or the previous ones have been insufficient, he said.
"France hasn't had a balanced budget in 40 years, France has known mass unemployment for 30 years, France has had an eroding competitiveness for ten years. These problems have accumulated," Lamy said.
Compared with other troubled countries in the region, such as Portugal, Spain or Ireland, Lamy argued that "France is probably the one that had the highest problem to reform." And while the current government is trying to combat problems, in Lamy's view, "The quantum is still a bit short and the time horizon is still a bit long."
Youth unemployment 'cancer'
However, not all is bad for the Gallic country. According to Lamy, the market is unlikely to punish France, and social tensions, while rising, are not expected to reach a dangerous point.
However, without the necessary reforms, the country will continue its "slow drift", especially as youth unemployment continues to hover around the 25 percent level.
"This sort of cancer is a medium- and long-term risk for this country," Lamy said.
Lamy, who now heads the Oxford Martin Commission for Future Generations, said one way to tackle youth unemployment would be to waive France's minimum wage policy.
" I know what I say is heresy," said Lamy. "I'm fully in favor of the minimum wage, (but it) should be waived for unqualified young people who are trying to get in the labor market."
The topic is highly inflammatory in France where the minimum wage stands at 9.53 euros ($13.22) per hour before tax.
Last month, Pierre Gattaz, the leader of France's powerful MEDEF Union, proposed a lower minimum wage for younger workers. However, the idea was quickly doused by the government, who flatly refused to consider it.
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