"...But mandatory vacation days and high unemployment benefits?...

This is a problem in Germany. One of the reasons only big companies can exist there. Some people there are having 3 month vacation.

"...the costs of firing are so high..." It is very hard to fire there because of the Unions.

"...And France isn't a nation of small businesses. Their best industries seem to be those really complicated infrastructure ones that require a lot of state intervention (bullet trains, nuclear reactors) and luxury goods (LV)..."

Absolutely right. You can extend this statement to other countries in Europe as well.