- 07-05-2012, 08:13 #4071
In the wider scheme of things, I think this is the best outcome. Either France will prove that cut backs are unnecessary or else it will smash the cosy little Merkosy cabal that has enabled such extensive can kicking for the last couple of years and the Eurozone will finally have to face reality.
- 07-05-2012, 08:19 #4072
It is not often I post something from the press, but this article in Bloomberg is pretty much in line with my thinking:
Euro Strength Intact as Contagion Ends Aussie Dollar Haven - Bloomberg
The market behavior is rather interesting at the moment. The overall tendency to over react was not apparent last week in the case of France. Around Thursday it was realised that what Sarko would gain moving to the right, he would lose from the center, and the center is where elections are won, the failed last debate settled it.
But the tendency to over react is tempered by the realisation that there is little scope for manoeuvre. Politicians are not implementing spending cuts for fun, the market will simply not tolerate increasing debt at the moment, period. Hollande can only play the cards in his hand, which may be bad for France in the short term, but will have little impact outside in the bigger picture.
If he is smart, he will realise his inexperience and gather a competent team around him to run the show, we will have to wait and see......
- 07-05-2012, 08:21 #4073
- 07-05-2012, 08:53 #4074
It's not like the markets really had much faith in the Merkosy austerity mantra, it had been fraying at the edges as with various heavyweight opinion formers like Lagarde cautioning on the negative effect on growth. After all that puff about fiscal prudence they are mainly reacting to the ECB warding off a EU banking collapse disaster by throwing money at europe's still very dodgy banks while the ghost of the Reichsbank shrieks in the corner, Hollande is only likely to mean more of that, the French banks need to buy time.That's the most foul, cruel, and bad-tempered rodent you ever set eyes on!
- 07-05-2012, 09:15 #4075
- 07-05-2012, 09:21 #4076
The problem now is that he has made the classic mistake of thinking he knows what he is doing now without help. While he may have gotten away with a little bit of knowledge and experience in easier times, at the moment there are too many disparate forces at play, and he is out of his depth.
- 07-05-2012, 09:24 #4077
Wordsmith wrote: 2) An inability of political parties right across Europe to admit that we cannot afford the current level of social spending and it has to be cut back.
Admittedly its on a much smaller scale, but in the State elections in Nord Rheinwestfalen next weekend overspending by the Socialists is a major subject. They see no problem, but the CDU (rightish wing) definitely does and so do the Liberals. Having said that the election is small scale it must be remembered that NRW has a population of around 14 million, thats equal to or more than some European countries.
- 07-05-2012, 09:35 #4078
- Join Date
- Feb 2004
"I think Dave does not trust him an inch."
He is reputedly Dave's mate. Now Dave is stuck with him.
Be interesting see what happens in the "Forecast" Reshuffle.
John Redwood for Chancellor.
- 07-05-2012, 09:51 #4079
- 07-05-2012, 10:00 #4080