As Happy And Wealthy As...A Frenchman?

Some enjoyably counterintuitive figures for you today.

The French, who are famous for being incredibly gloomy, for applauding soak-the-rich rhetoric and for grinding economic stagnation, are actually happy and pretty darn wealthy, as it turns out.

A new poll for Le Monde by BVA (ironically the same polling agency that ranked France as more pessimistic than Afghanistan and Iraq) found that 81% of French people were happy. Happy and rather self-satisfied, given that more than two-thirds said they were better off living in France than in US, Europe or the rest of the world. A majority also said that President Francois Hollande and his Socialist administration, which only a year ago seemed to embody popular French resistance to austerity and any change to the generous social safety net, needed to be more aggressive in pursuing reform.

Compare that with Credit Suisse's Wealth Report from October, which reported that France has more dollar millionaires than any other country in Europe. A country that culturally shies away from bling, that views bosses and businesses as barely one notch below demonic and that supports more taxes on the wealthy has more millionaires than the UK or Switzerland! Of course, once you hit the 50 or 100 million dollar mark, France finds itself overtaken by Germany and the UK. But the millions matter.

A lot of this won't come as much of a surprise to France-watchers, who know that French households have for decades been shunning debt and risk and accumulating wealth by stocking up on property (a whopping two-thirds of assets) and tax-friendly life-insurance funds. As a result the French are more prepared than most think to see changes to their social model. You tend not to want more austerity once you actually feel its effects; see how the Brits have turned on George Osborne's bitter economic medicine.

The question is what happens next to all this wealth. Can house prices avoid a serious correction? Will the French always be happy with low-leverage, low-return investments? Will the happiness itself continue? The hope in some corners must be that with minimal changes to the system and a cyclical pick-up in confidence, those wealthy French households will go back to spending again. But for the pessimists, that would only make the next crash much harder to overcome.