Good news from French President Hollande: The eurozone crisis is over, or something

posted at 4:01 pm on June 10, 2013 by Erika Johnsen

Well, that’s a relief, I must say.

The eurozone crisis is over, French president Francois Hollande said as he sought to reassure Asian investors on a visit to Japan.

“What you need to understand here in Japan is that the crisis in Europe is over,” he said. “And that we can work together, France and Japan, to open new doors for economic progress.”

Europe needs to put more emphasis on taking steps to promote growth and competitiveness “so that we can have a better presence in the world”, he added.

Mr Hollande, the socialist leader who oustied Nicolas Sarkozy, is not the first European politician leader to declare an end to the crisis. Last year the Spanish prime minister Mariano Rajoy said that “the worst has passed” for the euro.

It was a good try, I’m sure, at trying to encourage Asian investors to have no fear in investing in the French and European economies, but unfortunately for Hollande and his Socialist administration, just saying it doesn’t make it true. Some of the eurozone’s various financial ministers might consider the currency bloc technically out of the woods on what they see as the risk of a breakup (a point I would suggest that they seriously reconsider), but the collective economy has been struggling through recession for the past six straight quarters, and unemployment is above twelve percent — the highest the 17 nations together have seen since the euro’s introduction in 1999. Worse still, the ECB is predicting that the bloc’s economy will only shrink even further this year (they are also predicting that things will start looking up in 2014, but sadly, we’re all too well aware of how those types of predictions tend to go — and how things could start really improving for the long term without any major, substantive changes to the haphazard and top-down manner in which the eurozone functions, remains unclear).

The European Central Bank has predicted a deeper than expected slump in the eurozone economy as its president, Mario Draghi, said the institution had discussed negative interest rates in a bid to kickstart growth.

The ECB said the economy of the euro’s 17 members will shrink by 0.6% this year compared with the previous forecast of a 0.5% decline. However, the bank was more optimistic about 2014, inching up its growth forecast from 1% to 1.1%.

As for France specifically, a recent mild increase in international demand is one of the few bright spots on a very dark and grim economic horizon, a lifeline that Hollande is clearly trying to encourage with his appeal to Asian markets — but France’s lack of competitiveness is largely due to their horrible soak-the-rich tax scheming and their outsized public spending. Until he fixes that, attempts to spur growth by attracting foreign investment is just another short-term band-aid.

Today’s French industrial confidence report came as President Francois Hollande’s tax increases weighed on domestic demand in an economy that has barely grown in two years.

Hollande is struggling to balance demands of reviving growth and trimming the budget deficit. Yet with more than 20 billion euros ($26 billion) of tax increases now feeding through to companies and households in France, domestic demand is unlikely to fuel any recovery in the months ahead, economists say.

“The problem is that the tax increases are now starting to be felt in full,” said Bruno Cavalier, an economist at Oddo & Cie in Paris. “In the short term I see no improvement in the overall situation.” …

The International Monetary Fund said last week that it expects French GDP to shrink 0.2 percent in all of 2013 after stagnating in 2012.


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Brie or bleu?

LeftCoastRight on June 10, 2013 at 4:05 PM

Merde

Schadenfreude on June 10, 2013 at 4:06 PM

110% tax rate for all the Euro-weenies and the crisis is solved…

PatriotRider on June 10, 2013 at 4:10 PM

Oh, boy, he’s at it, helas, again…

jimver on June 10, 2013 at 4:10 PM

“The problem is that the tax increases are now starting to be felt in full,” said Bruno Cavalier, an economist at Oddo & Cie in Paris. “In the short term I see no improvement in the overall situation.” …

This will happen later this year and into next year here in the US as Obama Care kicks into high gear. Way to toss a wet blanket onto a struggling worldwide economy Leftists.

Johnnyreb on June 10, 2013 at 4:15 PM

The eurozone crisis is over, French president Francois Hollande said

Oh, and Mayor Vaughan called. The beaches will be open for the 4th of July.

apostic on June 10, 2013 at 4:16 PM

Domestic verstion – Obama’s America

Schadenfreude on June 10, 2013 at 4:16 PM

Lady Thatcher pointed out that the “problem with Socialism is that sooner or later you run out of other people’s money.”

In the case of the EU, it amounts to how long Germany is going to hold up all the weak sisters on the Continent before their taxpayers and government say, “Enough!” and force the rest – including France – to stand on their own two feet.

Internationally, they’ve only been propped up by the universal weakness of the major economies. Sure, they complain of weak demand but if the US and Japan were growing robustly enough to be a stimulus for EU exports, investment capital would run faster than a Frenchman at the sound of gunfire.

Adjoran on June 10, 2013 at 4:16 PM

Did the Japanese laugh at Hollande like the Chinese laughed at Geitner?

Resist We Much on June 10, 2013 at 4:20 PM

I’m amazed that idiots like this have been able to juggle chainsaws since 2009. I have new found respect for government employees.

DFCtomm on June 10, 2013 at 4:22 PM

In the case of the EU, it amounts to how long Germany is going to hold up all the weak sisters on the Continent before their taxpayers and government say, “Enough!” and force the rest – including France – to stand on their own two feet.

Adjoran on June 10, 2013 at 4:16 PM

You don’t seem to be seeing the other side of this trade. Germany may very well continue to prop up the weaker nations in exchange for a true physical union. A physical union ran by Germany.

DFCtomm on June 10, 2013 at 4:25 PM

But of course…..

In other news, Elijah Cummings reassures us that the IRS scandal is “solved.”

UltimateBob on June 10, 2013 at 4:32 PM

Did the Japanese laugh at Hollande like the Chinese laughed at Geitner?

Resist We Much on June 10, 2013 at 4:20 PM

Given the Japanese are for the most part still following the Euro plan to unsuccessfully get out of the start of their third consecutive Lost Decade, what do you think?

Steve Eggleston on June 10, 2013 at 4:34 PM

Given the Japanese are for the most part still following the Euro plan to unsuccessfully get out of the start of their third consecutive Lost Decade, what do you think?

Steve Eggleston on June 10, 2013 at 4:34 PM

Tru dat. Yep, they entered that third lost decade by kicking off QE-Rd 8. Hey, it will work sooner or later! Just ask Paul Krugman.

:-)

Resist We Much on June 10, 2013 at 4:38 PM

Lady Thatcher pointed out that the “problem with Socialism is that sooner or later you run out of other people’s money.”

In the case of the EU, it amounts to how long Germany is going to hold up all the weak sisters on the Continent before their taxpayers and government say, “Enough!” and force the rest – including France – to stand on their own two feet.

Internationally, they’ve only been propped up by the universal weakness of the major economies. Sure, they complain of weak demand but if the US and Japan were growing robustly enough to be a stimulus for EU exports, investment capital would run faster than a Frenchman at the sound of gunfire.

Adjoran on June 10, 2013 at 4:16 PM

DFCtomm pointed out the other Euro possibilty – Greater Germany.

If Red China would give up their version of proto-Communism even temporarily, that would sink everybody else.

Steve Eggleston on June 10, 2013 at 4:40 PM

Imagine — putting a socialist in charge of an economic recovery! Good thing WE didn’t do . . . uh . . . er. . .

RobertMN on June 10, 2013 at 4:59 PM

German courts are threatening to make the whole euro house of cards kaput.

German court case could force euro exit, warns key judge

Socratease on June 10, 2013 at 5:14 PM

The eurozone crisis is over, French president Francois Hollande said as he sought to reassure Asian investors on a visit to Japan.

“What you need to understand here in Japan is that the crisis in Europe is over,” he said. “And that we can work together, France and Japan, to open new doors for economic progress.”

Translation: Europe is in trouble and Japan can bail us out.

Angela Merkel n’est pas d’accord. She wants the Deutschemark back.

Steve Z on June 10, 2013 at 5:26 PM

Europe needs to put more emphasis on taking steps to promote growth and competitiveness “so that we can have a better presence in the world”, he added.

Yeah, it NEEDS to, but can’t find the gumption to do it!

GarandFan on June 10, 2013 at 5:44 PM

Good news from French President Hollande: The eurozone crisis is over

Translation: he silenced his critics. No more critics, no more crisis!

Marcola on June 10, 2013 at 5:45 PM

With things going so well in France, I guess they’ll start lowering taxes next. Right?

xdwall on June 10, 2013 at 5:48 PM

“What you need to understand here in Japan is that the crisis in Europe is over,” he said. “And that we can work together, France and Japan, to open new doors for economic progress.”

Whenever the Socialists call for “work together” that can be defined as both countries raising taxes to similar high levels so the people and companies can’t get away.

RJL on June 10, 2013 at 5:56 PM

Wow, a bald faced lie, just like Zero! They should be bosom buddies!

dogsoldier on June 10, 2013 at 6:26 PM

Translation: We are going into more and bigger debt!!!

albill on June 10, 2013 at 6:27 PM

Hey if it works for French president Francois Hollande maybe I will work for me *Ahem* “The Obamacare fiasco is over!”

Varchild on June 10, 2013 at 7:20 PM

He’s certainly every bit as bright as his American counterpart.

MNHawk on June 11, 2013 at 8:59 AM

“Oui! Zee bank account in zee Carribean, eet ees full!”

mojo on June 11, 2013 at 2:40 PM