Courtesy of Mish.
With sovereign debt yields in most of Europe stabilizing, and the euro on the rise vs. the US dollar there is a growing sense of complacency in the eurozone. Such complacency is not warranted.
I sense another storm in Southern Europe and huge problems ahead for the core of Europe, including Germany and France. The focus of this article is France.
Young French Losing Hope as Prospects Fade
French president Francois Hollande has not delivered on his promise to create jobs so Young French Lose Hope as Prospects Fade.
Youth unemployment in France has been high for some time, but it has now climbed to 26 percent. For decades, regardless of their political affiliation, lawmakers have been promising to create a better situation for young people. But exactly the opposite has happened. Labor laws protect those who already enjoy steady jobs, while the economic crisis and recession have limited the number of new jobs created. Meanwhile, housing has become both scarcer and pricier.
Some 23 percent of the country’s 18- to 24-year-olds live in poverty, according to a study by the National Institute for Youth and Community Education (INJEP). These are mainly high school or university dropouts who have little to no access to health care and limited chances of improving their situations.
Such is the folly of Hollande’s Economically Insane Proposal: “Make Layoffs So Expensive For Companies That It’s Not Worth It”. If companies cannot fire workers, they will not hire them in the first place.
Coupled with foolish tax hikes on businesses and consumers alike, rising unemployment should be expected, and that’s exactly what has happened. Businesses are upset, as well they should be, yet the politicians have not gotten the message that they are the problem.
Last week, Arnaud Montebourg, the French minister of industrial renewal, threatened steel giant ArcelorMittal, with “temporary nationalization” if Mittal shut down two furnaces, eliminating 630 people. Mittal employs 20,000.
Montebourg’s inane proposal sent shock waves all the way up to the president’s office.
French in Denial as Crisis Deepens
Spiegel reports French in Denial as Crisis Deepens
In the midst of the economic crisis, France’s Socialists are denying reality. The minister of industrial renewal is calling for nationalization of some industries, while the president shies away from necessary structural reforms. Business leaders fear the clock has been turned back 30 years.
France’s business leaders felt as if they had been set back 30 years, to a time when the first Socialist president of the Fifth Republic, François Mitterrand, began his term with a wave of nationalizations and, after two years, was forced to reverse his policy. Some even drew a comparison with 1945, when the government nationalized automaker Renault after accusing it of having collaborated with the enemy. Wasn’t Montebourg, who had always been an eloquent preacher of deglobalization, dividing business owners into different camps, good and evil, patriotic and unpatriotic?
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