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Meanwhile, as Greece
continues to distract the markets,
France, the other primary
prop for the EU besides
Germany, is now experiencing an economic
contraction on par with that of
2008-2009.
Indeed, France’s
September’s auto sales numbers
were worse than those of September 2008 (the month
Lehman collapsed). The country’s PMI reading is back to April 2009 levels. Even the French Central Bank, which
would hold off as long as
possible before unveiling
bad news, has announced
the country will re-enter
recession before year-end.
Over the past few weeks, an extraordinary cry of alarm has risen from chief executives
who warn that the French economy has
gone dangerously off track.
In an interview to be published on Nov. 15 in the
magazine l’Express, Chief Executive
Officer Henri de Castries of financial-services
group Axa (CS:FP) warns that
France is rapidly losing ground, not only against Germany but against nearly all its European neighbors. “There’s a strong risk that in
2013 and 2014, we will fall behind economies
such as Spain, Italy, and
Britain,” de Castries says.
On
Nov. 5, veteran corporate
chieftain Louis Gallois released
a government-commissioned report calling for “shock treatment” to restore French competitiveness.
And on Oct. 28, a group of 98 CEOs published an open letter to Hollande that said public-sector spending, which at 56 percent of gross domestic product is the highest in Europe,
“is no longer supportable.” The letter was signed
by the CEOs of virtually every major French company.
(The few exceptions included utility
Electricité de France, which is government controlled.)
http://www.businessweek.com/articles/2012-11-...rench-ceos-help
We get additional confirmation that
France is in big trouble from its partner
in propping up the EU, Germany.
German
Finance Minister Wolfgang Schaeuble
has asked a panel of advisers
to look into reform proposals for France, concerned
that weakness in the euro
zone's second largest economy could come back to haunt Germany and
the broader currency bloc.
Two officials, speaking on condition of anonymity,
told Reuters this week that Schaeuble
asked the council of economic advisers to the German government, known as the "wise
men", to consider drafting
a report on what France should
do…
"The biggest problem at the moment in the
euro zone is no longer Greece,
Spain or Italy, instead it is France, because it has not undertaken anything in order to truly re-establish its competitiveness, and is even heading in the opposite
direction," Feld said
on Wednesday.
"France
needs labour market reforms, it is
the country among euro zone countries that works the least each year, so
how do you expect any results from
that? Things won't work unless
more efforts are made."
http://uk.reuters.com/article/2012/11/09/u...E8A80MN20121109
France will be a bigger
problem than Spain or Italy for the EU?!?! That is
one heck
of an admission from a German
official. If France deteriorates then it’s game over for the EU. The current
bailouts mean Germany is already on the hook for an amount equal to 30% of its GDP. If
France tanks the amount will
balloon astronomically. At that point it’s game over.
This is why the Powers That Be in Europe are absolutely terrified of
what’s happening there.
Best Regards,
Graham Summers
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