Second, the program is laughably small. Details are vague, but it appears the program is to be spread over “a decade”. Makes 1.2 bn euro a year. That is less than 0.06% of annual GDP. S’il vous plait. Soyons serieux!
Third, and perhaps most dammingly as far as the evaluation of EU economic governance is concerned, the program is not to start until 2016. This is because of the government’s commitment under EU rules to reduce the budget deficit below 3% by 2015. As Prime Minister Ayrault phrases it “Investment and budget responsibility go together”. This is Orwellian in its linguistic reversal of fact and logic and monumental in its economic stupidity. France’s economy is in recession. Unemployment at record levels. Interest-rates are at historic lows. Monetary policy is constrained. The situation is crying out for government to borrow to invest. Instead the French government’s commitment to European fiscal rules, which do not properly distinguish between current and capital spending, are forcing it to delay the program until 2016, when the deficit will be smaller.