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Why France is Screwed
Posted on 10/9/26 at 2:22 pm
Posted on 10/9/26 at 2:22 pm
WSJ Editorial yesterday. Ouch.
quote:
France has been especially hard hit by the recent global rise in bond yields. The rate on the benchmark 10-year government bond last week exceeded 5% for the first time since 2002. The spread between French OATs and German bunds (the eurozone’s safest asset) is now wider than 140 basis points, the most since the eurozone crisis of 2010-12.
Politicians in Paris are in denial. The government last ran a fiscal surplus in 1974, and an annual deficit above 5% of GDP is normal. Debt stands at 120% of GDP. Revenue is inadequate to Paris’s spending urges, despite or rather because of high tax rates that extract 51% of French GDP each year. Revenue from taxes on personal and corporate incomes and consumption is flat. Special levies such as a windfall-profits tax on energy companies generate less revenue than predicted.
All of this taxation alongside endemic overregulation is suffocating economic growth. GDP grew 0.8% last year, is expected to do the same this year, and if they’re lucky it’ll hit 1.1% in 2027. Perhaps this explains why French yields remain below the rates on U.S. Treasurys. In America, investors are betting on growth in addition to Washington’s fiscal dysfunctions.
Paris formed these spending habits in an era when the European Central Bank was aggressively buying bonds under its quantitative-easing program. In some years central-bank purchases of French debt exceeded net issuance. No longer. Current quantitative tightening leaves it to private investors to absorb French bonds and many of those investors, especially insurers and pension funds, are less willing.
If Paris won’t grow, can’t tax its way out of the fiscal hole, and can’t borrow, spending will have to be cut. This is turning French politics into a violent game of musical chairs in which no one wants to be the last special-interest group caught without a seat. The riots are the latest example. Previous instances include nation-wide strikes against increasing the retirement age, and the 2018 yellow-vest protests about taxes on diesel fuel.
Yet you’d never know this is the most pressing challenge facing France to judge by the incipient presidential campaign. Mr. Mélenchon says the central bank should simply forgive the French bonds it currently owns. He also accused the head of the French central bank of treason on Tuesday for suggesting spending cuts. “Off with their heads” has a long, if not glorious, history in France.
The riots are probably helping the chances of Marine Le Pen of the insurgent-right National Rally. But she offers no more than token reform. One of her signature issues is a pledge to reduce the retirement age to 60—after President Emmanuel Macron’s effort to raise it to 64 from 62 has hit political obstacles.
France’s main problem isn’t math. It’s slow growth. The right fiscal reforms, such as tax cuts and welfare and pension reforms that encourage work and investment, would create new opportunities for prosperity. Young people would be the biggest beneficiaries. The alternative is what’s happening in the streets.
Posted on 10/9/26 at 2:25 pm to prplhze2000
France is weak.
Reap what you sow.
Reap what you sow.
Posted on 10/9/26 at 2:26 pm to prplhze2000
They will surrender like always
Posted on 10/9/26 at 2:27 pm to prplhze2000
The debt to gdp ratio for the US is also abysmal….. stanky
However, the current administration is growing the gdp as a fundamental way of paying down our national debt. But don’t let anyone convince you that it is because they have any other choice than default…. which is to say “no options”
However, the current administration is growing the gdp as a fundamental way of paying down our national debt. But don’t let anyone convince you that it is because they have any other choice than default…. which is to say “no options”
Posted on 10/9/26 at 2:33 pm to The Torch
quote:
They will surrender like always
First they're going to beg for bailouts though.
frick France. This is what happens. I hope they burn the motherfricker from one corner to the other. Hopefully the rest of Europe notices but I assume they have their heads so far up their asses, by the time they'd be able to do anything, they'll be under Sharia Law.
Posted on 10/9/26 at 2:35 pm to prplhze2000
France is an example of what happens when you start running out of other peoples money and you cant print money like we can
Posted on 10/9/26 at 2:37 pm to prplhze2000
Well obviously the answer is to import more third worlders and put them right on the public dole. Haven't they learned anything from the success stories of that?
Posted on 10/9/26 at 2:46 pm to Giantkiller
quote:
frick France. This is what happens. I hope they burn the motherfricker from one corner to the other.
Good lord.
Some of you are the most miserable people. I feel sorry for your family and “friends”. Posted on 10/9/26 at 3:05 pm to jizzle6609
They really are in a pinch as even Germany doesn’t want them nor could they afford them. They are not far behind. Now those Muslims don’t care anyway as most don’t care about much other than mosques, sheep ( younger the better) and boys( again younger the better) even food is down the list ( unless goats and yes the younger the better)
Posted on 10/9/26 at 3:11 pm to prplhze2000
France is such a shite hole the muzzies might abandon it
Posted on 10/9/26 at 3:12 pm to prplhze2000
The students, in part, see little future for themselves. Unfortunately, instead becoming more economical free and capitalistic, they have been spoon fed socialism and communism and are clamoring for more of it
Posted on 10/9/26 at 3:22 pm to Giantkiller
"Rest of Europe"....currently there are similar riots in Spain, irregular riots in Ireland & Scotland & London has its own share of off & on riots.
Posted on 10/9/26 at 3:24 pm to Mo Jeaux
Come on......of course they have no friends. So many are retired and sitting in their houses,all day long perusing the internet in search of their next outrage and reposting snippets from X.
Posted on 10/9/26 at 3:57 pm to KiwiHead
quote:
Come on......of course they have no friends. So many are retired and sitting in their houses,all day long perusing the internet in search of their next outrage and reposting snippets from X.
Are you talking about the French or the posters on this board?
Posted on 10/9/26 at 3:59 pm to Mo Jeaux
quote:
Some of you are the most miserable people. I feel sorry for your family and “friends”.
I assure you, my life is absolutely wonderful. My family and friends - all magnificent. We have great times.
Now, to address my thoughts on Europe which I guess you find offensive. Nearly every country in the entire region is policed terribly, cannot operate at any rational levels within their budgets, they all have terrible immigration problems, labor problems, education problems. They know that the only way to stop this is to use a heavy hand but they don't know how. It's like they all want to be retirees, and nobody wants to work. You take that system - which is probably BARELY holding on - and you want even more entitled spending, more free shite. But then hilariously, they want open borders which bring people in who do not assimilate, they don't work. These people want free shite too but they want more. And they're angry.
Europe is lazy. And they've been so for a long time. Now they want to be lazier, and they're cool with just letting every low class, hands out migrant come waltzing in free of charge. They think these people are gonna show up and next they'll be riding around on bicycles with baguettes, waiving a French flag with a beret on. Instead, they want free shite. And they want to shout Allah Ackbar. And they don't intend on working, assimilating or leaving.
You enable take these people, and the people who champion them. Next thing you know, you have professional anarchists who've entered the fray, waiving Palestinian flags and terrorizing people. And you have mayors who are afraid to offend anyone, afraid to do anything. Police chiefs scared to death. People PAID TO PROTECT YOU and they're doing nothing.
So frick France, frick Italy, frick Germany, frick Spain and frick the UK. Let them all take their medicine. And if you don't like me, then frick you too. All of this is true and you know it.
Posted on 10/9/26 at 4:03 pm to cadillacattack
quote:
The debt to gdp ratio for the US is also abysmal….. stanky However, the current administration is growing the gdp as a fundamental way of paying down our national debt
Gotta love people who make this their stated plan, but cut nothing in an effort to get there.
Posted on 10/9/26 at 4:45 pm to prplhze2000
quote:
The text argues that France is facing a serious financial crisis caused by excessive government spending, slow economic growth, and an unsustainable tax burden. Rising borrowing costs and declining support from the European Central Bank are making it harder for the French government to finance its debt. Meanwhile, political leaders are reluctant to make the spending cuts and economic reforms the author believes are necessary, contributing to public unrest and political instability.
Main Points
1. France's borrowing costs are rising sharply.
The interest rate on France's 10-year government bonds recently exceeded 5% for the first time since 2002.
The difference between French and German borrowing costs has widened to its highest level since the eurozone debt crisis of 2010–2012.
Investors are increasingly concerned about France's financial stability.
2. Government spending and debt are unsustainable.
France has not recorded a government budget surplus since 1974.
Annual budget deficits exceeding 5% of GDP have become commonplace.
Government debt has reached approximately 120% of GDP.
Despite collecting taxes equivalent to 51% of GDP, the government cannot generate enough revenue to cover its spending.
3. High taxes and excessive regulation are hurting economic growth.
Tax revenues have largely stagnated, and special taxes have raised less money than expected.
High taxes and burdensome regulations discourage economic activity and investment.
Economic growth remains weak, with GDP projected to grow only about 0.8% annually in the near term.
4. France can no longer rely on the European Central Bank.
In the past, the European Central Bank purchased large quantities of French government bonds, helping the government finance its deficits.
The ECB has shifted toward quantitative tightening, reducing its bond holdings.
Private investors, including insurance companies and pension funds, must now absorb more French debt and are becoming less willing to do so.
5. Financial pressures are fueling protests and political instability.
The government faces growing pressure to reduce spending, but different interest groups oppose cuts that might affect them.
Previous examples include protests against raising the retirement age and the 2018 yellow-vest demonstrations over fuel taxes.
Recent riots reflect the broader frustration surrounding the government's economic and fiscal problems.
6. Political leaders are avoiding difficult choices.
Left-wing leader Jean-Luc Mélenchon has suggested that the central bank forgive the French government debt it holds.
Marine Le Pen's National Rally may benefit politically from the unrest, but the author argues that her proposals do not address the underlying problems.
Her pledge to lower the retirement age to 60 would increase pressure on public finances.
7. Economic reform is the proposed solution.
The author argues that France's fundamental problem is not simply its debt burden but its weak economic growth.
Proposed solutions include reducing taxes, reforming welfare programs, and changing pension policies to encourage people to work and businesses to invest.
Young people could benefit most from an economy that creates more opportunities and sustainable prosperity.
The Author's Central Argument
The author believes France has reached a point where it cannot continue spending at its current rate without stronger economic growth, additional borrowing, or painful spending cuts. Because raising taxes further is unlikely to solve the problem, the author favors reforms that encourage work, investment, and economic expansion.
The central warning is that politicians who avoid these reforms may preserve their political support in the short term but risk worsening France's financial problems and social unrest over the long term.
In One Sentence
France's growing debt crisis is ultimately a problem of weak economic growth and political unwillingness to reform government spending, taxation, and pensions—and avoiding those reforms could lead to even greater economic and social turmoil.
Posted on 10/9/26 at 4:52 pm to prplhze2000
France is essentially done. It isn't technically, yet, but all of the seeds have already been planted. Muslims will be the majority there in about a generation. The only thing they can do is to mass deport and they have to get started like yesterday.
Posted on 10/9/26 at 5:03 pm to prplhze2000
Posted on 10/9/26 at 5:11 pm to The Torch
May be different if they see their kids going hungry.
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