MADRID | By Julia Pastor | France just started to go through its new year’s checklist. President Hollande announced last week budgetary cuts of €50 billion for 2015-2017, in addition to those €15bn revealed in September. The country urgently needs to increase revenues and it could do it via the sale of state-owned companies stakes such as a French and European reference like Airbus.
Op-ed by Ana Fuentes | We no longer hear about ‘Spailout’ nor ‘Grexit’, but there seems to be a euro zone’s new victim: France. A Newsweek magazine article called ‘The fall of France’ wondered about the Hexagone’s economic health and how it may be a burden for the EZ’s recovery. The problem is, some of the stated facts were wrong. French media are striking back.
LONDON | By Barclays analysts | France’s macroeconomic situation does not look that bad and on average the country compares well with other developed economies. It does not suffer from a major imbalance in terms of yearly flows (trade, finances, etc). However, weaknesses, perniciously accumulating over the years, have now been laid bare by the crisis.
Project Syndicate | By Dominique Moisi| In the mirror of Germany, the French must ask themselves fundamental questions. Have they made the right choices in terms of leaders and policies in recent decades?
MADRID | By Julia Pastor | Javier Flores, head of analysis at Asinver: “France’s economic system will not fall into bankruptcy, but the French model cannot be considered as a superpower any more.”
France has been advised by international institutions like the IMF and euro partners like Germany to do its homework before it’s too late. The answer that has come from the Elysée Palace, unfortunately, isn’t auspicious.
LONDON | George Irvin, University of London | Just look at Club-Med before dismissing this option: the only way for France (and the EU) to grow is by increasing spending, particularly public spending which is the largest component of French aggregate demand.
Why would president Hollande place such tax burden on the rich and corporate? He said France’s 2013 Budget was meant to demonstrate the euro zone that austerity and fairness can walk together the way out of the crisis. It looks as he’d rather protect a bloated state, though.