Along with Germany, France is the core of Europe. Its history is the history of Europe and Europe is inconceivable without France. Even more than Germany, its history incorporates the suffering, the wars, the defeats and also the revolutions that make up the Europe we have today.

But the events which led to yesterday’s resignation of its government have been long in coming.

Many might think that Germany is now the supreme country in Europe just because, after the reunification, it is the largest country on the continent. That is true, but it is also true that some years ago, under a Chancellor who was disgraced for his toil, Germany put in place reforms that have delivered strength and growth.

France, with an industrial basis not inferior to that of other countries and with some industries that are in the forefront of technology, should not have found it difficult to find growth. The fact is: it didn’t.

France has always been a country of revolutions and the revolutionary heritage of the past has bred in it a grass roots bastion of socialism and communism. Germany, on the contrary, following the end of World War II, did not have this kind of heritage.

Thus, hampered and hindered by a Leftist ideology which insisted on a huge government employment machine and trade union rules that hindered flexibility, the economy stagnated.

This situation was already evident years ago before Nicolas Sarkozy got elected as president. He promised to redress the situation but spent his presidency on bling and did not carry out significant reforms.

For his pains he was beaten by Francois Hollande who promised a ‘normal’ presidency cloaking an anti-business agenda. Businesses fled to London and investment stagnated.

Growth, promised so many times, proved to be elusive and the latest figures show France in recession with no growth forecast for this year and the next. Meanwhile, the unions are on the warpath, promising a hot Autumn. And Hollande’s government collapsed over the weekend over inflammatory comments made by his own minister not just criticising his own government’s economic strategy but also attacking the German hegemony which he, along with characters like Matteo Renzi and others, blame for the pan-European austerity, massive unemployment and lack of growth.

The result was the resignation of the government to be succeeded by most probably a second edition of the same government minus the rebels. France is already infringing the Community rules about the deficit and public debt and there is no way the Commission, and most member states, will allow France to get away with this. Recent history tells us that the 2008 crisis was in part caused by some potent members, France included, who made the Commission look the other way while they infringed the regulations. We know what happened later: the millions out of a job are the direct result of this.

Whatever happens now will be an object lesson in handling macroeconomics. There is much to be said for stimulating demand and kick-starting growth but that cannot be done through increasing the deficit and public debt.

It is not just France which is in the sick bay right now, Italy is a fellow patient. They are staring recession, increased unemployment and the breakdown of law and order in the face unless they take courageous steps to cut the deficit, decrease taxes and introduce even though belatedly reforms which make employment rules and practices more flexible.

Europe, we often hear, is based on a social model that is very different, more humane, than the one in the US. The events in France show that Europe is not out of the woods yet. Europe must agree on the right way forward unless it is to enter a long phase of deflation that so hurt Japan for 10 years in the 1990s. The French government, as it stands today, divided and out of sorts,  is not in a position to show the way ahead.