The President of France, Francois Hollande, is immersed in a serious problem. His popularity has plummeted as he has driven his country's economy to stagnation (second consecutive quarter of zero growth). But in addition, France is gradually becoming the weakest link in the euro zone along with Italy, without there being any significant possibility that both countries can get out of this situation on their own.
There was a time when leading economists thought that Spain, Greece or even Portugal would unleash the ultimate crisis that would endanger the euro and lead to the disintegration of the entire bloc. However, it is now France that is gradually taking on the role of greater threat to the single European currency. What is certain is that the eurozone crisis has entered a second phase.
The symptoms may not be as severe as a few years ago, but they are at least quite striking. Zero economic growth or recession in countries like Italy are indicative that European bank balance sheets will start to lose again. Without going any further, the European Central Bank It is not being able to establish an adequate monetary policy due to the decline of economies such as Germany, France or Italy.
If we leave the eurozone, Great Britain, for example, will grow 3,4% this year and 3% in 2015, according to data released by the Bank of England. In the second quarter of 2014, the British economy grew by 0,8%, while the German economy suffered a contraction of 0,2%, even before the impact that the European and US sanctions on Russia. Therefore, a very difficult third quarter is expected for the countries embarked on the euro.
France, precisely, has not grown anything so far in 2014. In this way the French authorities, led by Hollande, have been forced to cut their growth forecasts from 1% to 0,5% for this year (some numbers that really only handle the most optimistic). Forecasts for 2015 have been reduced to 1% growth. France has not yet enjoyed two consecutive quarters of positive growth since the beginning of 2012.
The lack of growth has completely thwarted Hollande's fiscal plans. The French president had hoped to cut the budget deficit to 3,8% this year, but in recent days he has been forced to admit that the maximum that can be reached will be 4% of GDP. Without a doubt, he is in serious trouble ...