Monday, June 25, 2012
France Next?
Cyprus to ask for bailout from eurozone partners
"The BBC's chief economics correspondent Hugh Pym described Cyprus' problems as "classic contagion"". France must find up to €10bn (£8bn) of savings to bring its budget deficit under control this year, finance minister Pierre Moscovici has said. How long before Pierre follows the Greek Finance Minister and resigns? More bank dirty linen to come from France? Hollande is now really anxious about Euro banking - he must have a clue how bad it all is. Bluster and denial will only go so far, as Rajoy found out to his cost. Another Summit on Thursday... what's on the menu this week, I wonder?
Posted by alan @ 10:15 PM (1491 views)
6 thoughts on “France Next?”
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alan says:
“Mr Hollande will be cutting the retirement age for some workers to 60, putting the top marginal income-tax rate up to 75%, raising taxes on wealth, inheritance and dividends, increasing the minimum wage and making it much harder for employers to fire workers. Far from curbing the size of the public sector, at 56% of GDP the biggest in the euro zone, he seems likely to expand it. With these policies he is acting against the grain of change in the rest of the EU. This will do nothing to improve France’s competitiveness which, as its gaping trade deficit shows, has declined fast. Nor will it make the business climate any friendlier” says the Economist.
jack c says:
Alan, “France Next?” – a couple of the high profile fund managers at Jupiter have been predicting a bail of French banks for around 18 months or so.
alan says:
Jack c @ 2,
OK, I’m late to the party (raises hands). I realised my thinking was a bit behind when I watched Newsnight last night.
Ashdown, Hain and Davies all accepted a need for a referendum on Europe. Farage just wanted to garotte Van Rompuy. I guess its a sign of the times when this sort of political debate goes mainstream. However, there were a few comments from the audience to suggest that the German taxpayers pay for southern Europe’s profligacy.
jack c says:
Alan, my comment wasnt meant to suggest you were lagging behind on this matter just a flag to say some major investment houses have had long term concerns over France or more specifically French Banks.
“I guess its a sign of the times when this sort of political debate goes mainstream” – true but the majority of people I suspect only wake up to the seriousness of such a situation when the cash machines stop working Nat West style.
alan says:
I’ve had a quick surf around. Some of Reuters figures may be out of date, but recent articles said:
“French banks, including BNP Paribas SA (BNP), Societe Generale SA and Credit Agricole SA, held $541 billion of private and public debt in Greece, Ireland, Italy, Portugal and Spain at the end of 2011, the most by foreign lenders, Bank for International Settlements figures show. They’ve cut back on sovereign holdings in these countries”.
Hollande could be upset if the markets ignored Italy and instead went for France! (also Reuters).
general congreve says:
@6 – Let’s just hope the markets go for someone and go for it hard enough to collapse the euro ponzi. I’m tired of waiting.