France has no government and no budget, and is politically gridlocked

The country’s traditional parties of centre-left and centre-right have fragmented. In its recent presidential elections, half of voters have opted for extremists in the first round. 

President after president has failed to get the budget under control. The underlying problem is that most French voters are unwilling to face economic reality. Like other ageing European countries facing competition from America and Asia, France is spending unsustainably. 

France’s debt stock is an alarming 110% of GDP.

Northern Europeans used to mock the PIGS—Portugal, Italy, Greece and Spain—for their profligate ways.

So far, the financial markets have remained calm. 

The declaration by Mario Draghi in 2012 that the European Central Bank stood ready to do “whatever it takes” to defend the euro remains in force today.

In the past, voters’ discontent would have led to a healthy change of government. 

However, France is also a stark warning of where the politics of disappointment leads today. 

When voters have tired of centrist coalitions or weak minority governments, the only other choice before them is the political extremes. 

There is a real possibility of an RN-led government in France next year, or even a Le Pen presidency in 2027 when the next election must be called.

If Mr Macron stuns France by deciding that his presidency has become so unbearable that he resigns, it might come even sooner.

The Economist 4 December 2024

https://www.economist.com/leaders/2024/12/04/france-steps-into-deep-trouble

Marine Le Pen said France can overcome government collapse to deliver a budget in “a matter of weeks” — so long as the next prime minister is prepared to narrow the deficit more slowly.

Le Pen: France Budget Likely Within Weeks If Macron Eases Debt Path - Bloomberg

Tillbaka till Rolfs länktips 5 december 2024

https://englundmacro.blogspot.com/2024/12/rolfs-lanktips-5-december-2024.html