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After Greece obtained its third bailout last summer, Europe turned its attention to other crises. But it would be naive to conclude that the sovereign debt crisis is over. The Greek drama is still far from a happy ending; in Portugal and Spain, fragile left-wing governments may want to abandon austerity and roll back reforms; France has declared a state of economic...
Dr. Michael Wohlgemuth
News that the French economy recorded positive growth in the first quarter of 2015 fails to reveal the full picture and could actually damage the longer-term perspective. The government, thanks to its partner Germany, has continued to delay imposing the full suite of necessary reforms. One quarter’s figures could actually delay further reforms.
Dr. Emmanuel Martin
Figures show that France and the eurozone are technically out of recession. But analysis reveals that growth in France is very fragile and the government is required to carry out reforms if the economy is to recover fully. Delaying or abandoning a reform programme could lead to further deterioration in both French finances and the economy.
The stakes are high to sort out the difficulties in the French economy. And as unemployment increases to 3.26 million and the economy tips into recession President Francois Hollande has little room to manoeuvre without threatening the European project. But will the president be bold enough to launch deep reforms and what strategy will he adopt?
Rating agency Moody's removed France from its top-ranking triple A rating. The downgrade came only days after President Francois Hollande had made a genuine policy 'U-turn' to restore the country's competitiveness. But the downgrades could accelerate if France cannot reform itself seriously and its financing abilities could become more problematic.