Skip to comments.Is France the Next Greece?
Posted on 11/11/2011 6:46:32 AM PST by Kaslin
On January 7, long before Italy was in the spotlight of mainstream media attention, I wrote Italy The Invisible Elephant.
It was five or six months before Italy became an uncloaked popular economic topic.
However, "elephant hunting" is now a popular sport and mainstream media has done a better job at spotting the next one (with help of S&P threats to France's AAA rating of course).
Elephant Spotting Articles
San Francisco Chronicle: France Plans EU7 Billion in Taxes, Cuts to Save AAA Rating
Los Angeles Times: Eurozone debt jitters creeping into French bondsFrance unveiled tax increases and spending cuts amounting to 7 billion euros ($9.6 billion) for next year to defend its triple-A rating as growth slows and Europe's debt crisis deepens.
The country will increase some levies on large companies, push up the lower end of its range of value-added taxes and curb welfare spending, Prime Minister Francois Fillon said today.
"French people must roll up their sleeves," Fillon said at a press conference in Paris. "We have one goal: to protect the French people from the severe difficulties faced by some European countries."
Ah yes, how can you save Greece and Italy if your concern is to save yourself?The European debt crisis has gone from bad to worse as Italian government bond yields have soared, threatening the solvency of the Eurozones third-largest economy.
But things could go from worse to worst if bond yields keep rising in France, the continents No. 2 economy after Germany.
The French government knows it cant afford for the bond market to turn on it. Paris announced a new round of spending cuts last week aimed at ensuring that the country holds on to its coveted AAA credit rating.
Moodys Investors Service warned last month that it might put a negative outlook on Frances top-rung rating if Paris made too many commitments to back up its banks or other Eurozone states with tax dollars.
But Frances need to protect itself also raises doubts about its ability to extend help to Italy as Romes debt nightmare worsens.
France owns a ton of Italian debt. Italy goes down France goes down.
France is to Greece as Texas is to Rhode Island.
It will be many many many times worse.
France and Germany are both in terrible fiscal shape. They can continue until investors stop buying low yield bonds, but neither have any better chance of actually paying off their debt than Italy.
No....they’re the next bunga bunga. Sorry, I plagiarized Paul Krugman. Where’s my nobel prize?
I don’t think Germany is, at least not yet
german debt ratios are modest compared to the rest.
Could it be SOCIALISM?
When France goes down the financial drain, the corrupt E.U. system will collapse, but Germany will retain the remaining economic power in Europe.
It will be especially worse to see the reactions of the immigrants when their welfare payments are eliminated. Paris will be burning.
Don`t worry about any crash, it`s not gonna happen.
The ELITES, the SOCIALISTS in charge, will create WW III before allowing a complete economic collapse.
Book on it.