What really makes the difference between France and Germany?

In 2014, very low growth is expected in France (0.6%), and fairly high growth in Germany (1.9%). What really accounts for this difference between France and Germany? We know that Germany:

    ? Has a far more sophisticated production than France, and therefore has no problems of competitiveness or corporate profitability affecting manufacturing profit margins;

    ? Is close to full employment, whereas unemployment is very high in France;

    ? No longer has any public finance problem since it has already returned to a balanced budget, whereas France's fiscal policy has to remain restrictive;

    ? Conversely, is faced with far more drastic population ageing than France, which is normally synonymous with low spending;

    ? Is far more dependent than France on exports and the vigour of international trade.

    Is the growth performance differential between Germany and France expected in 2014due to these known differences between the two countries and their expected consequences, or does it have other causes?

    ? There will be no reduction in the fiscal deficit in Germany, whereas in France the structural deficit must be trimmed by 1percentage point of GDP in 2014;

    ? Household demand is growing in Germany, especially housing investment, despite population ageing;

    ? Despite full employment, the real wage is not increasing much in Germany;

    ? Despite the advantage in terms of product sophistication and competitiveness, Germany's exports are not growing faster than those of France.

    It is therefore fiscal policy and household behaviour that make a difference.