Why the French economy is in need of reform?


Europe’s engine is starting to sputter. This week’s slide in Germany’s business confidence index to a 19-month low shows that the best part of the German upswing is over, says Ralph Atkins in the Financial Times.

A survey reflecting the steepest fall in eurozone service industry growth in two years, thanks to the embattled financial sector, also bodes ill. Businesses are facing higher borrowing costs amid the credit squeeze, and lower confidence could crimp investment and hiring, in turn undermining consumption. And the rapidly rising euro threatens the continent’s buoyant exports. RBS has now reduced its 2008 eurozone growth forecast to 1.7% from 2.1%.

In France, meanwhile, economic worries extend beyond a regional slowdown. Last week prime minister Francois Fillon said France was “bankrupt” and would keep sliding down the global growth league unless it got a grip on its finances: France “has not passed a balanced budget in 29 years. This can’t go on.” European Central Bank president Jean-Claude Trichet also took a dim view of the public finances, noting that France’s massive and unreformed state sector is the biggest in the EU, consuming 53% of GDP. So is anything being done about it?

French economy: what next?
Not much. The 2008 budget is a case of “plus-ca-change”, said Pierre Briancon on Breakingviews.com. “France will remain a big spender” next year and taxes will be slightly lower, so the budget deficit will stay “too high”. There has been scant progress on revamping the bloated and inefficient state apparatus – crucial to lowering spending and boosting long-term growth– although not replacing a third of retiring public servants is at least a step in the right direction. We’re still waiting for Nicolas Sarkozy’s “la rupture” – the break from the past he promised in his presidential campaign. (moneyweek.com)


Q4 State Debt Ratio at 73.5% Debt

Q4 State Debt Ratio at 73.5%

Lawmakers Could Ratify Sweden's NATO Accession on Feb 26 Int’l Relations

Lawmakers Could Ratify Sweden's NATO Accession on Feb 26

DVM Group Strengthens With 2 New Directors Appointments

DVM Group Strengthens With 2 New Directors

Number of Chinese Tourists in Hungary Quadruples From Pre-CO... Tourism

Number of Chinese Tourists in Hungary Quadruples From Pre-CO...


Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.