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| Consumer Frugality Adds to Woes in France | |
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| PARIS — On a recent Sunday at the sprawling Marché aux Puces de St. Ouen, France’s largest and most famous flea market, crystal chandeliers glinted in a rare patch of Parisian sun. | PARIS — On a recent Sunday at the sprawling Marché aux Puces de St. Ouen, France’s largest and most famous flea market, crystal chandeliers glinted in a rare patch of Parisian sun. |
| An ornate Napoleon III-era clock perched on a marble mantelpiece, and sales signs peeked from vintage clothing, vinyl LPs and other curios that have long drawn throngs of shoppers here, jostling for a bargain. | An ornate Napoleon III-era clock perched on a marble mantelpiece, and sales signs peeked from vintage clothing, vinyl LPs and other curios that have long drawn throngs of shoppers here, jostling for a bargain. |
| But something seemed amiss on this afternoon, as it has almost every weekend for more than a year. As with so much else now bedeviling France, the economy is to blame. French consumers simply are not spending the way they used to, and that is an impediment not only for the merchants of the Marché aux Puces, but also for the country’s ability to emerge from recession. | But something seemed amiss on this afternoon, as it has almost every weekend for more than a year. As with so much else now bedeviling France, the economy is to blame. French consumers simply are not spending the way they used to, and that is an impediment not only for the merchants of the Marché aux Puces, but also for the country’s ability to emerge from recession. |
| “It used to be elbow to elbow here,” said Hamidou Debo, a shoe vendor who sat quietly in his outdoor stall as a handful of people browsed through silver-hued sandals and black leather high-tops before shuffling away without buying. “Now the crowds are around half what they used to be.” | “It used to be elbow to elbow here,” said Hamidou Debo, a shoe vendor who sat quietly in his outdoor stall as a handful of people browsed through silver-hued sandals and black leather high-tops before shuffling away without buying. “Now the crowds are around half what they used to be.” |
| For Mr. Debo and 2,500 other merchants in the 17-acre market on the northern edge of Paris, an economic slowdown has gripped business, and there is no telling when things might turn around. Last year, he said, he regularly made 300 to 400 euros, or $390 to $520, in sales by lunchtime. Now he barely makes 100 euros. | For Mr. Debo and 2,500 other merchants in the 17-acre market on the northern edge of Paris, an economic slowdown has gripped business, and there is no telling when things might turn around. Last year, he said, he regularly made 300 to 400 euros, or $390 to $520, in sales by lunchtime. Now he barely makes 100 euros. |
| “It’s the crisis,” Mr. Debo said. “People are no longer spending. They are worried about what the future will bring.” | “It’s the crisis,” Mr. Debo said. “People are no longer spending. They are worried about what the future will bring.” |
| Europe’s long-running economic troubles have been, for the most part, confined to the feeble countries of Europe: Greece, Spain, Portugal and Italy. But more and more they are coming home to roost in France, raising questions about whether one of the Continent’s biggest economies may become the next sick man of Europe. | Europe’s long-running economic troubles have been, for the most part, confined to the feeble countries of Europe: Greece, Spain, Portugal and Italy. But more and more they are coming home to roost in France, raising questions about whether one of the Continent’s biggest economies may become the next sick man of Europe. |
| By many measures, France is already moored in malaise. Unemployment is at its highest point since the current record-keeping system began in 1996 — 10.8 percent — and job creation has been on a downward trajectory for more than a year. | By many measures, France is already moored in malaise. Unemployment is at its highest point since the current record-keeping system began in 1996 — 10.8 percent — and job creation has been on a downward trajectory for more than a year. |
| These problems, coupled with tax increases and government spending cuts intended to keep the deficit and rising debt under control, mean that France is now struggling to exit a shallow recession, its second in four years. Even if the recession does end this quarter, the economy is expected to remain stagnant at best, contracting by 0.1 percent this year, according to the French statistics agency Insee. | These problems, coupled with tax increases and government spending cuts intended to keep the deficit and rising debt under control, mean that France is now struggling to exit a shallow recession, its second in four years. Even if the recession does end this quarter, the economy is expected to remain stagnant at best, contracting by 0.1 percent this year, according to the French statistics agency Insee. |
| No wonder households have tightened their purse strings. But that has become part of the problem, given that consumer spending represents 56 percent of French economic activity. | No wonder households have tightened their purse strings. But that has become part of the problem, given that consumer spending represents 56 percent of French economic activity. |
| “The consumer has always been the motor of the French economy,” said Jean-Paul Fitoussi, a professor of economics at the Institut d’Études Politiques de Paris. “If that economic engine does not work, then where is the growth going to come from?” | “The consumer has always been the motor of the French economy,” said Jean-Paul Fitoussi, a professor of economics at the Institut d’Études Politiques de Paris. “If that economic engine does not work, then where is the growth going to come from?” |
| President François Hollande, who recently acknowledged that the economic situation was serious, is offering a grab bag of measures meant to stimulate growth, including a program to create thousands of subsidized jobs for the rising ranks of unemployed youths. This week he announced a plan to invest 12 billion euros in the energy, digital, aerospace and health industries. | President François Hollande, who recently acknowledged that the economic situation was serious, is offering a grab bag of measures meant to stimulate growth, including a program to create thousands of subsidized jobs for the rising ranks of unemployed youths. This week he announced a plan to invest 12 billion euros in the energy, digital, aerospace and health industries. |
| Mr. Hollande is also urging the French to be optimistic by citing forecasts that France and the euro zone will begin to emerge from their slump by next year, if all goes well. | Mr. Hollande is also urging the French to be optimistic by citing forecasts that France and the euro zone will begin to emerge from their slump by next year, if all goes well. |
| But persuading the French may be no easy task. | But persuading the French may be no easy task. |
| On Wednesday, the French employers union Medef warned that Mr. Hollande’s policies were destroying 8,000 jobs a day. The chief executives of Peugeot and other French corporations called for “urgent measures” to stem unemployment. | On Wednesday, the French employers union Medef warned that Mr. Hollande’s policies were destroying 8,000 jobs a day. The chief executives of Peugeot and other French corporations called for “urgent measures” to stem unemployment. |
| In June, consumer confidence hit its lowest level in France since records started being kept in 1972. With unemployment still rising, households were more pessimistic than ever about the prospects for future living standards, according to Insee. Consumer spending, which contracted last year by 0.4 percent, is expected to remain stagnant for the foreseeable future, despite a slight pickup last month, the agency said. | In June, consumer confidence hit its lowest level in France since records started being kept in 1972. With unemployment still rising, households were more pessimistic than ever about the prospects for future living standards, according to Insee. Consumer spending, which contracted last year by 0.4 percent, is expected to remain stagnant for the foreseeable future, despite a slight pickup last month, the agency said. |
| What’s more, the French are continuing to hold onto a chunk of their savings for rainy days they see coming. The personal savings rate is 15.5 percent, lower than the nearly 17 percent rate in 2011, but still well above the 2.5 percent rate in the United States. That is a lot of euros not being pushed through the economy. | What’s more, the French are continuing to hold onto a chunk of their savings for rainy days they see coming. The personal savings rate is 15.5 percent, lower than the nearly 17 percent rate in 2011, but still well above the 2.5 percent rate in the United States. That is a lot of euros not being pushed through the economy. |
| No place may be more emblematic of the consumer state of mind than the Marché aux Puces, whose name translates as flea market. It was so named in its early days in the 1870s because of the presumably flea-infested furniture among the goods carted in from the city’s trash heaps by vendors known as “rag and bone men.” In subsequent decades Pablo Picasso was said to stroll the market for inspiration. The 2011 Woody Allen film “Midnight in Paris” featured the market in a pivotal scene. | No place may be more emblematic of the consumer state of mind than the Marché aux Puces, whose name translates as flea market. It was so named in its early days in the 1870s because of the presumably flea-infested furniture among the goods carted in from the city’s trash heaps by vendors known as “rag and bone men.” In subsequent decades Pablo Picasso was said to stroll the market for inspiration. The 2011 Woody Allen film “Midnight in Paris” featured the market in a pivotal scene. |
| Today the market is something of a microcosm of the French economy, with merchants in a vast outdoor area peddling inexpensive clothing, shoes and accessories for low-income shoppers, next to thousands of pricey antique and curio stalls that cater to an affluent crowd. | Today the market is something of a microcosm of the French economy, with merchants in a vast outdoor area peddling inexpensive clothing, shoes and accessories for low-income shoppers, next to thousands of pricey antique and curio stalls that cater to an affluent crowd. |
| On the recent Sunday, not far from where Mr. Debo sat, waiting for customers, Lauriane Barclais, a French public finance agent, said she and her boyfriend were cutting back sharply on expenses, and had virtually stopped eating in restaurants. In a rare splurge, Ms. Barclais had just paid 125 euros for a leather winter coat, but only because it was discounted by 50 percent. | On the recent Sunday, not far from where Mr. Debo sat, waiting for customers, Lauriane Barclais, a French public finance agent, said she and her boyfriend were cutting back sharply on expenses, and had virtually stopped eating in restaurants. In a rare splurge, Ms. Barclais had just paid 125 euros for a leather winter coat, but only because it was discounted by 50 percent. |
| The couple said several of their friends had lost jobs, were looking for work or could find only temporary employment. Nearly everyone they knew had become more parsimonious. “Everything has become more expensive — food, rent — but salaries stay the same,” Ms. Barclais said. “The economy is not going well, and I don’t see it improving.” | The couple said several of their friends had lost jobs, were looking for work or could find only temporary employment. Nearly everyone they knew had become more parsimonious. “Everything has become more expensive — food, rent — but salaries stay the same,” Ms. Barclais said. “The economy is not going well, and I don’t see it improving.” |
| Achraf Dzyzai, a seller of children’s clothing in the outdoor market who recently discounted everything in his stand to 10 euros or less, had a similar lament. “We’ve lowered our prices,” he said, “but I’ve been sitting here for more than an hour with no buyers.” | Achraf Dzyzai, a seller of children’s clothing in the outdoor market who recently discounted everything in his stand to 10 euros or less, had a similar lament. “We’ve lowered our prices,” he said, “but I’ve been sitting here for more than an hour with no buyers.” |
| Mr. Dzyzai says his typical customer earns minimum wage, which in France is around 1,430 euros per month, about $1,880, before taxes. “The crisis is dominating their thinking,” he said. | Mr. Dzyzai says his typical customer earns minimum wage, which in France is around 1,430 euros per month, about $1,880, before taxes. “The crisis is dominating their thinking,” he said. |
| “The economy was bad, but now it has become terrible,” said Michel Corbez, the bespectacled owner of an Asian antique furnishings stall, as a well-heeled French couple strolled by. “The policies of the current government are like the nail in the coffin.” | “The economy was bad, but now it has become terrible,” said Michel Corbez, the bespectacled owner of an Asian antique furnishings stall, as a well-heeled French couple strolled by. “The policies of the current government are like the nail in the coffin.” |
| As if flagging sales were not bad enough, Mr. Corbez said taxes on the boutique and on a larger store he owned in a Paris suburb had surged this year to 6,000 euros annually, about $7,800, from 350 euros five years ago. “It’s clear the government is desperate for money,” he said. “But we are being taxed so much, we feel like we are left with very little. It makes you think they don’t know what they’re doing.” | As if flagging sales were not bad enough, Mr. Corbez said taxes on the boutique and on a larger store he owned in a Paris suburb had surged this year to 6,000 euros annually, about $7,800, from 350 euros five years ago. “It’s clear the government is desperate for money,” he said. “But we are being taxed so much, we feel like we are left with very little. It makes you think they don’t know what they’re doing.” |
| Down the hall from Mr. Corbez, Noureldin Elcheikh sat in the boutique he has run for 14 years, offering 19th-century French tapestries, gilt-framed mirrors, chairs covered with red damask silk and opulent cloisonné vases. He drew on a cigarette to pass time. “We’ve never seen things as bad as they are now,” Mr. Elcheikh said. | Down the hall from Mr. Corbez, Noureldin Elcheikh sat in the boutique he has run for 14 years, offering 19th-century French tapestries, gilt-framed mirrors, chairs covered with red damask silk and opulent cloisonné vases. He drew on a cigarette to pass time. “We’ve never seen things as bad as they are now,” Mr. Elcheikh said. |
| “France is already sick,” he added. “Things were slow, but purchasing power seems like it fell off a cliff since last October.” | “France is already sick,” he added. “Things were slow, but purchasing power seems like it fell off a cliff since last October.” |
| He sighed: “It’s like the world has stopped.” | He sighed: “It’s like the world has stopped.” |