7 days ago
Austerity Measures, Markets' Confidence Loss… The Specter of a Greek-Style Crisis for France
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French Prime Minister François Bayrou presented his public finance recovery plan as a necessary evil to avoid France suffering a crisis similar to the one Athens experienced 15 years ago.
'Comparing today's France to Greece in 2010 is undoubtedly excessive. We're not there yet,' Christian de Boissieu, professor emeritus at the Paris 1 Panthéon-Sorbonne University and vice-president of the Cercle des économistes think tank, said about the comparison François Bayrou drew during his press conference on July 15.
Was this image a way for the French prime minister to seek greater support for his rigorous public finance recovery plan? Bayrou presented the over-indebtedness as a 'curse' against which 'the Greek people, the Greek state, have been forced to make enormous sacrifices,' cutting pensions by '30%' and civil servant salaries by '15%.' 'That's exactly what we don't want,' Bayrou emphasized, pedagogically.
France is not there yet. Its deficit, standing at 5.8% of its GDP (gross domestic product) — the worst in the eurozone, admittedly — is still far from reaching that of Greece in October 2009. This had been the starting point of an acute debt crisis that lasted until 2015…
