“So it’s goodnight from him, and a big smile from me”.Despite the Orwellian farce of French ‘austerity’, Sarkozy is little worse than the rest of the gang.
In today’s earlier post, I noted how the EU/IMF band of brothers have been getting snotty with Hungary over its ‘massive’ 4.5% deficit. However, despite the fact that France’s deficit stands slightly higher at 8%, President Sarkozy told union officials today that France would not be undertaking an austerity programme. This after he told the EU Summit last month that his country was “more than ready to face the pain”.
There are may who would call a 3-year public spending freeze an austerity measure, and The Slog is one of them. It’s nowhere near enough, but it is an austerity policy. But Nicolas disagrees.
That much we can all agree on, but the credibility at stake here is nothing less than France’s eurozone membership: in the ten years since the zone began, France has never been within the 3% limit. Not once. Mind you, Germany itself was outside from 2002-2006 inclusive, and Italy missed it in 2001, 2003 and 2004. When Greece went pear-shaped last year, its deficit was 12.7%.
This is presumably what the EU’s last fiscal summary meant by ‘lax fiscal enforcement’ in its last issue. Actually, what it meant was no fiscal enforcement: no member has ever been penalised since the euro’s launch in 2000.
It’s really not hard to see why credit managers and currency dealers find the eurozone an increasingly old and bad joke. Writing to The Slog yesterday, for example, a UK-based Swiss bank’s debt manager observed:
“Spain is in denial about the problem, and riddled with cover-ups. One day soon it will wake up dead”.
Meanwhile, in Sarkozyland all is well. One in two retiring bureaucrats will not be replaced, and the retirement age may be raised – but not if the Unions get out of their box about it….which they will.
The State pension deficit alone in France is 11billion euros a year, and rising.
The Slog 