France is bankrupt?

[HoreTore]

Heard this on the radio tonight(I get BBC World now, no more lame pop music for me, WOHO!!).

The EU's central bank director(or something...) said that France is dragging down the entire economy of the EU... And then they quoted a french minister of some sort, who declared that France is bankrupt.

So, what's going on? Is it just a hoax to gain some support for hugely unpopular and idiotic "economic measures" or am I just paranoid and it's really true? If so, how could it happen?

I know I'm doing my part to keep the people of Bordeaux and Champagne employed...

[Marcellus]

Here's a BBC article (http://news.bbc.co.uk/1/hi/business/7010087.stm). Sounds like France has a large budget deficit, but it would be a bit much to declare it bankrupt.


European Central Bank chief Jean-Claude Trichet has attacked France for being Europe's "number one spender".

Mr Trichet warned that in comparison to its GDP, the country was well on the way to spending much more than its European neighbours during 2007.

The warning came as Prime Minister Francois Fillon warned that France's finances were in a "critical" state.

French finances have caused friction with Europe, with France under pressure to cut its budget deficit.

[Louis VI the Fat]

Heard this on the radio tonight (I get BBC World now, no more lame pop music for me, WOHO!!).

The EU's central bank director(or something...) said that France is dragging down the entire economy of the EU... And then they quoted a french minister of some sort, who declared that France is bankrupt.

So, what's going on? Is it just a hoax to gain some support for hugely unpopular and idiotic "economic measures" or am I just paranoid and it's really true? If so, how could it happen?

I know I'm doing my part to keep the people of Bordeaux and Champagne employed...Keep supporting the fine citizens of Bordeaux, whatever happens! :2thumbsup:

Thanks Marcellus. Here are some more little tidbits of information:
the 'French minister of some sort' is the Prime Minister, François Fillon. He did not mean that France is literally bankrupt, that it can't pay her bills. He meant that the level of government spending is unsustainable. Which is considered scaremongering if you are left, or about bloody time if you are right.
To immediately drive the point home: he made his remarks in the provinces, in Corsica, before an audience of farmers demanding yet more money from Paris, for God knows what reason this time. :wall:
His point is, that France hasn't had a balanced budget since the 1980's, and that the government can't indefinately pay lavish subsidies, retirement benefits, and employ a gazillion very well paid civil servants. You can't run a chronic deficit forever.

Meanwhile, France has been having arguments with the ECB (European Central Bank). The head of which happens to be another Frenchman, Jean-Claude Trichet. The ECB is criticised for its fixation on tempering inflation, for keeping interest rates and the euro too high. Which are tempering France's economic growth, a growth that has already been factored into the budget.

The countries of the eurozone have a stabilization pact, obliging members to keep their deficit within certain limits. Naturally, mutual obligations is French for what others countries must do to support France's interests, but by now France's chronic deficit spending is become quite worrysome. So Trichet heartily welcomed Fillon's remark.

As for 'a hoax to gain some support for hugely unpopular and idiotic "economic measures"', well, I suspect that is what we will hear on the streets too this fall when Sarkozy tries to drive his reforms trough...
I mean who can blame the transport unions for going on strike next month, when such idiotic economic measures are proposed as trying to end train drivers receiving a full pension at the age of fifty.

[Xiahou]

Meanwhile, France has been having arguments with the ECB (European Central Bank). The head of which happens to be another Frenchman, Jean-Claude Trichet. The ECB is criticised for its fixation on tempering inflation, for keeping interest rates and the euro too high. Which are tempering France's economic growth, a growth that has already been factored into the budget.There's certainly some drawbacks to a unified currency, isn't there?

[HoreTore]

Thanks a lot, Louis :bow:

I seem to have this instinctive reflex that whenever a politician tells me that the economy is bad and in need of rethinking, the first thought that enters my mind is that he needs an excuse to free up funds for his pork... Or get an explanation as to why he failed to deliver...

[Louis VI the Fat]

There's certainly some drawbacks to a unified currency, isn't there?Some drawbacks, some advantages. On the whole, I am quite in favour of a unified currency.

And I do want an independent central bank (what you would call the Federal Reserve), one that doesn't cater to the short term goals of ever changing governments. In this sense, a common European Central Bank is even more difficult to intimidate, to be pressured by the demands of a single government.

It is a bit of a bummer that the policy of the ECB goes against the short to mid-term interest of France at the moment. But in the long run, I think the benefits outweigh the drawbacks.

[Ice]

And I do want an independent central bank (what you would call the Federal Reserve), one that doesn't cater to the short term goals of ever changing governments. In this sense, a common European Central Bank is even more difficult to intimidate, to be pressured by the demands of a single government.


I thought the EU had a central bank. I'm a bit ignorant on how the EU's banking system works, though.

Could you explain, please?

[Louis VI the Fat]

Poor phrasing of mine. Europe has indeed got a Central Bank. I meant to say that I approve of that, and that I want this bank to be independent.

[English assassin]

His point is, that France hasn't had a balanced budget since the 1980's, and that the government can't indefinately pay lavish subsidies, retirement benefits, and employ a gazillion very well paid civil servants. You can't run a chronic deficit forever.

And yet, the French seem to be able to. I wish I could work out how, along with having a huge big country with great scenery and good food. It must be great being french, although obviously the crushing envy of the British would be a drawback. :beam:


Ah well, back to work work work.

[rory_20_uk]

The current French president appears to be finally doing something apart from living it up, misusing police time and enjoying immunity from prosecution.

Yes, the medicine is unpleasant, but that is due to the length of time that nothing has been done.

~:smoking: