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French report French report
by Euro Reporter
2009-04-20 09:17:26
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Less pessimistic!

According to the monthly opinion poll BVA the economic confidence index among French people has increased for the second month running. Last month it was up 12 points. This month it has increased by a further 4 points. The pollsters stress that this does not mean that the French are victims to the old Rudyard Kipling joke “if you can keep your head when all about you are losing theirs – you don’t know what is going on”. The overall outlook is pessimistic and one employee in two expects redundancies in the coming months. The French are however a lot less pessimistic than in previous months. 

It may be that the relatively high level of savings held by French households and their very low level of investment in the stock market are related to the present improvement in sentiment. French private savings are 14% of gross domestic product, according to the European Central Bank - seven times higher than in Britain and the United States.

I suppose it is the expectations for the new wine!


The royal …Ségolène

The French Socialists know they will be led by a woman. They will not know until tonight which one. The result will be very close. Of the three candidates in the first round Benoit Hamon has most cause to be satisfied. He has come from nowhere to achieve a respectable 22.83%. He has immediately thrown his weight behind Martine Aubry who despite the wobbly support of Bertrand Delanoë only managed 34.74%. Together they ought to have won in the second round. If every member who voted for Hamon votes for Aubry then she will win comfortably. Hamon of course has no reason to support the leading candidate Royal because she has already said she will work with him. If Aubry wins she will owe him her success. A Royal win will not improve his position as much.

His supporters in the first round are unlikely to follow him like sheep. Hamon is broadly Euro-sceptic.
Aubry, daughter of the famous EU President Jacques Delors is a classic EU supporter. On the face of it they both oppose an alliance with the centre that Royal favours but in reality members know that whoever would beat Sarkozy in 2012 will have to make some arrangement with François Bayrou and his supporters. There are indications that some federations voted on block to support Hamon for tactical reasons to maintain the suspense and sell their votes dearly in the second round. On top of all that there remains a reservoir of members who did not vote in the first round.

The only thing the French have to remember is another five years with Nicolas!


France avoids recession

The announcement that the French economy grew by 0.14% in the third quarter of 2008 has baffled the pundits and delighted the government. While Germany, Italy, Britain and the United States have moved clearly into recession, France has managed to grow its economy, albeit by a small amount.

With a huge smile on her face, Christine Lagarde told F2 TV viewers that the figures would not be as bad as predicted. The key to this relative success would appear to be the French government's determined measures to encourage spending by France’s thrifty consumers. While the level of British savings, at zero per cent, are the lowest they have ever been since figures were first collected, the French have continued with their traditional tendency to make sure that there is always a cushion between them and financial disaster. The average French savings rate is more than 10% of Gross Domestic Product. While in recent years the rest of the world spent its savings with consequent growth, French consumers kept their money in the bank.
Compared with Germany, France also has the new-found advantage of not being the biggest exporter in the world. At the moment, it is exports which are suffering worldwide more than internal consumption. 

It remains to be seen whether this good quarterly figure has merely postponed the recession for six months or whether the governments pro-active measures will defy the international trend altogether. International forecasts are not encouraging but then a panel of 24 economists predicted that France would fall into recession this quarter and they were wrong.

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