The French economy is weighed down by below-average growth, poor competitiveness, a high public deficit and persistently high unemployment, the European Commission said Friday in a regular review of EU economies.
The report could spell trouble for French President Francois Hollande ahead of elections next year, after he wagered his electability on promises of firing up the country's sluggish economy.
"In France, growth is expected to remain moderate," the commission wrote, noting that the country's growth rate had been held back by lacking investment and "remains below the euro-area average."
The situation is not likely to improve much in the long term, the report finds, blaming "labour and product market rigidities," a high regulatory burden on French companies and a tax burden on the economy that is "not growth-friendly."
The European Union's executive also identifies poor competitiveness as a "source of concern," while adding that the country is lagging behind its eurozone counterparts in whittling down its deficit.
France is already under pressure to bring its deficit below the EU's targeted ceiling of 3 per cent of gross domestic product. It is expected to stand at 3.7 per cent of GDP for 2015, the report said.
Meanwhile, the country's unemployment rate - which stood at 10.5 per cent last year - is "not expected to decline in the short term," the commission noted.
The reports, issued for all EU member states apart from those in receipt of bailouts, will form the basis for economic recommendations that the commission is expected to issue next month.
The EU's executive also takes aim at Germany for low public levels of investment and a strong reliance on exports, while warning that the country's "ageing society will remain a key challenge."
Italy is encouraged to tackle "structural weaknesses" hampering its growth, including high public debt, while Spain earns praise for implementing banking sector reforms, but is also warned of the risks associated with its high levels of public and private debt.