...and the next financial crisis in Europe starts here:

France is one of the indebted countries in Europe and the new left wing government has rolled out its spending and tax plans which include:

Increase the minimum wage by 14%

Reduce the retirement age from 64 to 60

90% tax on the rich

Freezing prices in the shops

Increase government spending by at least £150 billion

When the euro-zone was formed it was declared that government debt should not exceed 60% of GDP (page 9 for details):

France is currently at 100% and is accused of hiding some of its debt

Modern economics - everyone trying to live off everyone else :slight_smile:


We’re coming full circle back to the original idea of slavery. You work, I eat.

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Since these are proposed plans, they are considered OT for this board.

Just saying. :slight_smile:

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Well, it’s good enough for Bloomberg:


…and most of the serious financial press as well - papers are full of it. Yields on French bonds have been spiking upwards all day:

It’s certainly upset the euro bond market:

This could quickly turn into a euro-zone crisis


I feel boorish when I have to explain a joke:

Note the part about proposals not signed into law yet.

Who in reality thinks that “risks” are thing that are yet to happen.


I’ve been watching the French economy for some time - it has been defying gravity but is now slipping into the same mess as the Italian economy (and a few others).

I suspect that the French bond market might well be one too many for the ECB to bail out:


This could be one of those black swan moments.

But proposal are things that move markets, particularly the bond market that is so highly leveraged and mired in derivatives.

In 2022 the UK Chancellor, Kwasi Kwarteng, proposed a ‘give away’ budget that panicked the bond market. It caused chaos and resulted in a massive sell off of UK bonds as dealers tried to cover their positions:

If nothing else this shows the delicate state of Western bond markets, and by implication, their underlying economies: