Between the end of May and end of September 2014 the Euro lost 10% of its value against the US Dollar on the exchange markets. This de facto devaluation delights France and its industrialists as it will help to revive exports which will be cheaper for foreign buyers. The Tourist Industry could also benefit as the cost of visiting France will be cheaper.
However France has an Economic Crisis to solve in order to attain the standards set out in the Golden Rules of the EUROZONE. In the 2015 Budget which is being prepared, Growth in 2014 is expected to be zero and the overrun of costs for the current year will be 4.3%. France could in fact be sanctioned if serious measures are not implemented to avoid the same problems next year.
What are the major problems needing attention ?
1) More flexibility concerning the 35 hour week.
2) Government departments must be streamlined.
3) More direct investment by the Government.
4) Age of Retirement should rise in line with longevity expectations.
5) Social benefits should be scrutinised and updated.
Not only France but Europe as a whole has suffered from high unemployment. Nonetheless, this is a major factor which explains the dismal stagnation of the French economy.
There is unrest in France already by the performance of President Hollande and his Governments. Taxes have increased but 7 million of the lowest earners have recently been exempted from paying any income tax. Still there is unrest because the unemployed want jobs.
Hollande is now half way through his five year term as President. Having dithered up to now he has little time left to inspire the Captains of Industry who have been waiting for a long time for action on at least the points referred to above.
The political opposition is waiting but no one can be sure of anything at this moment in time !
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