This is an excellent article from the FT. Check it out!
The article argues that French President Hollande will need to face reality, when the National Auditor knocks at his door in two weeks, widely expect to report big holes in France’s finances.
So far President Hollande has resisted full austerity, turning instead to draconian and politically motivated tax increases. By any international study, France’s Public Sector is bloated, inefficient and uncompetitive. For years, French Presidents have backed away from reform of the French Public Sector.
Surely, it is the time of the French Public Sector to tighten its belt, with a little help from the new French Government?
I fear that if the French President does not seize the initiative, then credit rating agencies and financial markets will probably start targeting France, pushing borrowing costs up like in Spain and Italy. I am sure that Chancellor Merkel and her colleagues will be watching closely.
- Seven ways to clean up our banking ‘cesspit’ – Martin Wolf – FT.com (dralfoldman.com)
- IMF warns of looming risk to recovery – FT.com (dralfoldman.com)
- Bernanke gloomy on economic outlook – FT.com (dralfoldman.com)
- Euro stumbles but stocks stable in thin trading – FT.com (dralfoldman.com)