French government ministers have reacted angrily to the front cover of the latest issue of the Economist magazine’s latest front cover – which features a bundle of French baguettes with a lighted fuse, under the headline “The time-bomb at the heart of Europe“. The special report warned that the dire state of the French economy – with its high unemployment, lack of competitiveness, dying industry and high public spending – could be the next biggest threat to the eurozone, dwarfing the problems of Greece or Spain.
The magazine warned François Hollande’s reforms did not go far enough to address the country’s economic woes and if these were not resolved, France could jeopardise the future of the euro. (The Telegraph).
Find the French video below.
What is going on in France? A few thoughts via the Telegraph.
French leader François Hollande is uncomfortably close to a collapse in credibility. His poll rating has sunk to 36pc. The speed of decline has been shocking.
The latest broadside comes from ex-German chancellor Gerhard Schröder, supposedly his ally on the Left.
“The election promises of the French president are going to shatter on the walls of economic reality,” he said in Paris.
The backsliding in the retirement age is indefensible and “cannot be financed”. Two or three more blunders of this kind and “reality will catch up with out French friends”.
The French are living in Alice and Wonderland. Bild Zeitung asked whether France is becoming the “new Greece”. You get the drift. (Full article here).
The French elections are approaching fast. While the main focus has been on Greece, Italy and SPain, let’s review some facts on France. From Scott Barber of Reuters.
The results of this past weekend’s first round of voting in the French presidential elections may have delivered a warning that the close alliance between France and Germany on strategies for tackling and containing the eurozone crisis may be approaching an end. For the last few years, the team of German Chancellor Angela Merkel and French President Nicolas Sarkozy has been so much in sync that they have become known to all as “Merkozy”. But in first-round voting, Sarkozy became the first French president in half a century to fail to emerge as leader, ceding pride of place to Socialist rival Francois Hollande.
Now the two men will square off in a runoff election scheduled to take place May 6, and it is the one-third of French voters who cast ballots in favor of other parties – including the National Front candidate on the extreme right, Martine Le Pen – who hold the balance of power. To understand the impact of these voters on the outcome, see the interactive graphic, below, which enables you to calculate how many voters who supported candidates that didn’t make it through to the run-off now need to switch their allegiance to Sarkozy in order for him to cling on to his job.
While Greece is receiving all the attention, Sarkozy is desperately trying to improve his chances of winning the elections. Merkel too, also in France. The question is, what would a non Sarkozy France mean for Germany? Merkel is doing everything it takes to obtain the merkozy relationship. From Spiegel.
It looked almost as if it could have been a wedding when German Chancellor Angela Merkel and French President Nicolas Sarkozy walked into the conference hall of the European Council building in Brussels last Monday. They nodded at each other and exchanged pecks on the cheek, the other heads of state and government moved aside.
The two, of course, were not in Brussels to be betrothed. Rather, they were the main characters at yet another European Union summit. This time, they were seeking support for their fiscal pact, which together they had hammered out in the hopes that it could contribute to saving the EU and its common currency.
If you just woke up. Italian rates are spiking above 7%. Spanish rates are joining. Don’t forget, it didn’t take many weeks with rates above 7%, before the other PIIGS asked for bail outs. The contagion is spreading to other countries. Belgium joining the party…. France next?
Silvio come back.
How fast things change in just an afternoon. Earlier today when ES Futures traded at 1230, it all felt so good. Just mentioning we would trade below 1200 today, some proclaimed we had lost it, but here we are again. The shorts closed out, the new positive longs, Biggs, freshly long, and the market at levels nobody thought remotely possible this morning. To make it more interesting, Moody’s is delivering some harsh words on France. Remember what we wrote of last Friday, What’s going on in France? Goodbye EFSF. Below from Moodys:
However, Moody’s notes that the government’s financial strength has weakened, as it has for other euro area sovereigns, because the global financial and economic crisis has led to a deterioration in French government debt metrics — which are now among the weakest of France’s Aaa peers.
European markets are threading water in no trend market. While we have focused on EFSF votes out of Slovakia lately, we seem to forget some of the spreads still widening. What is going on in France. Is France the next casualty?