"France Is Bankrupt"

The French Labour Minister caused a stir the other day by pronouncing his homeland as "bankrupt".
Strictly speaking of course France is not bankrupt. It can happily continue to trade due to the support of its parent "company" i.e. the G8 nations.
None of the G8 (Canada, USA, UK, Italy, Germany, Russia, Japan and France) would dare to let another member go bankrupt. Such an occurrence would have similar (but even greater) impact as the demise of Lehman Brothers had on the World's banking industry.
So France will never see bailiffs arriving at the door.
However, we all need to face the harsh reality that France IS bankrupt by all normal standards. The country has had budget deficits for as long as anyone can remember and there is no realistic hope of the country ever being able to make good the cumulative deficits.
Declining industry, inefficient agriculture, anti-business labour laws and over-generous state benefits all combine to render France an economic Black Hole.
France is very fortunate to be too big to be allowed to fail . The Greeks must look with considerable envy at how France is being allowed to continue relatively unscathed whilst their own country is being made an example of so that everyone realises that small countries cannot behave the same as the G8 nations.
Of course, Spain is in a worse position than France but is not a member of the G8. 26% unemployment is already a harsh lesson for Spaniards but it may be that the G8 will allow the pain to grow just so Greece doesn't feel too lonely.
Who says the World economic system is fair?








 

Sunday, 3rd February 2013

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