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The Bleu Model
France’s Socialist Civil War

As the world’s eyes are fixed on Greece, France is striving to get its own fiscal house in order. The Financial Times reports:

France’s economy minister has vowed to ram further economic reforms through parliament if needed to bypass mounting resistance in the governing Socialist party.

Emmanuel Macron said the French government would be ready to override parliament again after pushing through a package of business-friendly laws without a vote last week. The pledge comes as the European Commission on Wednesday demanded greater financial efforts and more reforms in exchange for leniency on repeatedly missed public deficit targets.

Like other French socialist leaders before him, President Hollande has undergone an education in economics while in office. And as was also the case for previous French administrations, he and his cabinet now have to fight members of his own party, who are not as exposed to some external realities.

What’s new is the urgency—and the dangers—that the multi-layered euro crisis creates. The measures being contemplated are not exactly revolutionary, but they are nonetheless significant in scope. That they are being contemplated at all is illustrative of how, for the leaders of France, the fear of contagion and the feeling that the euro rules can no longer be flouted quite so openly has started to sink in.

Paris’s position on the euro crisis is unique and precarious. On the one hand, as one of the eurozone’s biggest economies and a traditional leader of the EU, not to mention the home of a lot of big banks holding big loans in the south, it’s expected to enforce the rules. On the other hand, its own fiscal order is more Mediterranean than Teutonic, if truth be told. It looks like the Hollande Administration is moving to comply with Brussels’s orders—and perhaps shore up its own financial position in the process. But will it be able to do enough, without running into even more serious domestic opposition than this?

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  • Andrew Allison

    Like Greece, neither France nor Italy can produce enough (GDP) to live in the style to which they have accustomed their people. The reforms necessary to change that will be resisted furiously, and probably prevented until, à la grecque, their credit dries up.

    • gabrielsyme

      France, Italy and even Greece are relatively wealthy, even if they’ve been living somewhat beyond their means. The fiscal readjustment would really be less hard than the depressed employment they are living with due to the Euro. Over the medium & long-term, they will all benefit in terms of standard of living if they exit the Eurozone.

      • Andrew Allison

        France is negotiating to bust the eurozone deficit limit for the upteenth time, Italy’s per capita GDP has continued trending down ( as the Eurozone as a whole has recovered from the 2008 crisis, as has Greece’s ( The economies of all three are sclerotic, with very little chance of reform for the first two before a heart attack.

        • gabrielsyme

          I’m not sure where the source of your disagreement is. Exiting the Euro will undoubtedly be a rough adjustment and is likely to be unpopular (though I think this is overstated), but their economies will continue to stagnate for years until they do so.

          • Andrew Allison

            “France, Italy and even Greece are relatively wealthy.” The are, as you note, stagnant economies — I personally think that sclerotic is nearer the mark.

          • gabrielsyme

            A country can be wealthy and still have a stagnant economy. They may not be wealthy relative to the US, but they are in the international context.

          • Andrew Allison

            A country living on borrowed money it can’t possibly repay ( merely appears to be wealthy. The US BTW is one of them.

          • gabrielsyme

            Meh, GDP is GDP. To a certain extent GDP can be goosed by borrowing from foreigners, but that is basically fiscal stimulus, and the effect is less than the Krugmans of the world would have us believe. Borrowing money (even vast sums) does not mean an economy is entirely or even mostly a mirage. Nations that have vastly reduced their public borrowing have not seen a calamitous collapse in their economies.

  • Josephbleau

    The only interesting things going on in France are at the Grand Ecoles and the Molin Rouge.

    • Andrew Allison

      Should not the the increasing probability that FN will win the next election be included?

      • FriendlyGoat

        Yes. A Putin favorite for France is something to be thinking about.

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