Monday, December 16, 2013

FT Claims that France Is Holding Back the Eurozone

The Financial Times has a rather pessimistic piece on France today, which makes the claim that France is the sick man of the Eurozone. (I can't quote from the article without violating the FT's rather strict reading of the copyright laws, so you'll have to settle for the link and find your way beyond the paywall). Suffice it to say that the article's stark conclusion is based entirely on the Purchasing Managers' Index, which has been misleading in the past and probably is now as well.

Don't get me wrong, I don't think that the French economy is doing at all well. But to single it out as the weak link in the European economy is wrong, and probably a prelude to louder calls for stricter adherence to austerity by the French, on the grounds that more austerity-minded governments had a better third quarter. This is wrong-headed and short-sighted.


louis said...

No need to elaborate on that, since you already do it.
The surprise would be that the FT (or The Economist, or any paper in an arc going from Berlin to Washington via Stockholm) would "not" publish an article where France is depicted as the uggly duckling of the Eurozone, the root of all evil, the bad pupil and so on. It's getting kinda tiresome.

Passerby said...

The actual surprise is that the FT acknowledges that the Eurozone could possibly recover.

The FT editorial line is always the same:
- the EU is the root of all evil and follows degenerated economic principles.
- US economic policies go in the right direction, but execution is substandard.
- UK policies are flawless, if other nations were not so dumb they would mimic them.

The Economist has similar biases but, according to me, shows more intellectual honesty than the FT. I agree with Louis, this is tiresome. That's why I stopped reading this newspaper long ago.

DavidinParis said...

Employment laws...repeat it 10 times and it will sink in. While the EC has some general rules on the length of time someone can be hired on a temporary contract, my Italian, Spanish, Portugese, and even UK colleagues do not complain so vociferously as we employers do here in France. France is a problem and the size of its stagnant economy continue to worry investors. This stated, the FT, like others of its ilk, are biased but even a monkey can hit a bullseye.

Mitch Guthman said...

@ DavidinParis,

And yet, the economy of France is healthier and more resilient than any of the countries you mention. This suggests to me that the cause of Europe's disastrous economic predicament lies elsewhere. Perhaps with the policies of murderous austerity and neoliberalism that have foolishly turned an easily handled banking crisis into another Great Depression?