Tuesday, April 17, 2012

France, The Next Eurozone Domino To Fall?

A very good survey of the French economy and politics on the eve of the next presidential election (April-May) appears today in Seeking Alpha.

“In an important way, the situation in France is quite different , both worse and better, than that in Spain and Italy. In the latter two countries, reform programs are in place. They know what to do. But this isn’t at all the case in France. What’s more, this isn’t even discussed in the election campaign.

The upside is that in France, there really is a lot of room for reform. The public sector is way too big and markets could do with a jolt of new dynamism, so there is a lot of low hanging fruit. The downside is that this is hardly ever discussed in public, and not without reason. It isn’t at all a popular stance.”

It is even worse than that: the mood is “anticapitalist” on the left and “antiliberal” on the right, protectionist on both sides, and still pro-euro and deflationist among big businesses and most politicians. It is not surprising that The Economist found the French “elites” to be in a “state of denial”. 

The whole post here is well worth reading.

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