A new pecking order?

In last week’s Economist, the leader began thus:
FOR years leaders in continental Europe have been told by the Americans, the British and even this newspaper that their economies are sclerotic, overregulated and too state-dominated, and that to prosper in true Anglo-Saxon style they need a dose of free-market reform. But the global economic meltdown has given them the satisfying triple whammy of exposing the risks in deregulation, giving the state a more important role and (best of all) laying low les Anglo-Saxons…Indeed, a new European pecking order has emerged, with statist France on top, corporatist Germany in the middle and poor old liberal Britain floored.
So, is France’s economic model sclerotic or effective? Paradoxically, the answer is probably both….
In times of economic crisis, the system tends to serve the population well because it provides greater job protection than in the US or the UK; it distributes higher benefits, and some 21% of the workforce is actually employed by the state, protecting them from economic downturns. They are shielded from the major evils of our time: downsizing, outsourcing or bankruptcy…Hence, France has weathered the economic storm somewhat better than others: its economy should contract this year by some 3%, compared to 4% in the UK, 4.4% in Italy, and 5.6% in Germany…
Yet the system is expensive and cumbersome, relying on heavy taxation ( France's public spending represents 52% of its GDP, compared to 45% in the UK and 37% in the US) and an intrusive bureaucracy.
The cost of labor, and the abundant rules protecting it, inhibit job creation in times of economic growth . Hence, even in good times, the unemployment rate never dips below 8%.
One direct result is that French productivity is higher than in the US, because employers hire just the strict minimum…The Economist mentions one fast food chain that, for the same restaurants, has 33% less staff in France than in the UK…
It also a creates a sub class of workers who are hired as part-timers, or with temporary contracts, and thus can be easily disposed of when the economy stalls…
The bureaucracy, as well the thousands of labor laws that regulate employment, also hinder job creation as well entrepreneurship…To quote the Economist, the French are champion rule-makers.
In addition, the generous benefits are not always much of an incentive to find a job…
When Nicolas Sarkozy ran for president two years ago, he did so on a free market platform, aware of France’s poor economic performance and perennially weak growth rates…The economic crisis has thus had the paradoxical effect of rehabilitating the very archaic French model he sought to overhaul…
Hence, the window of opportunity to reform the old model has passed….
It may be many years before another arrives…