As France slides deeper into recession, Public confidence in Hollande slides.
- 54% are unhappy with president François Hollande’s overall performance.
- Only 33% trust government to cut debt
- Only 40% think Hollande can find a solution to the eurozone crisis.
However, people are happy with free money. They approve Hollande’s reducing the retirement age to 60, from 62, for some workers.
Lowering retirement age may make the affected workers happy, but the policy is economic folly in the face of increasing lifespans.
Moreover, those poll numbers are 100% guaranteed to get worse as Hollande is doing all the wrong things economically such as raising income taxes and supporting financial transaction taxes. Hollande’s job proposals are even worse.
War over Peugeot
The Financial Times also notes France’s powerful CGT union has promised “war” in September over the closure of Peugeot’s carmaking plant at Aulnay near Paris.
Peugeot fired 8,000 workers and that has both the unions and Hollande howling. For more details, please see Car Maker Peugeot to Cut 8,000 Jobs, Close Plant; Shape of Things to Come.
The union “war” will further pressure Hollande to follow through with his Economically Insane Proposal: “Make Layoffs So Expensive For Companies That It’s Not Worth It”
This is how I described the proposal in the preceding link:
Four Things, All of Them Bad
- Mass layoffs will occur before the law passes.
- Companies will move any jobs they can overseas.
- Ongoing, if it’s difficult to fire people, companies will not hire them in the first place.
- Corporate profits will collapse along with the stock market should the need to fire people arise.
The proposal to force companies to sell plants rather than fire workers as outlined by Industry Minister Arnaud Montebourg and Labour Minister Michel Sapin is nothing short of economic insanity.
Government Spending Over Half of French GDP
In Quick Facts on France, Heritage says “Government spending has increased to a level equivalent to 55 percent of total domestic output. The deficit remains more than 6 percent of GDP, pushing public debt up to more than 80 percent of GDP.“
Unemployment will Rise, GDP will Sink
In a recent panel discussion in Spain, Paul Krugman said he would start to worry when government spending is over 50% of GDP. France is already there.
As Hollande steers France further into the gutter, French unemployment (already over 10%) is bound to rise and GDP will sink.
Krugman’s cure? More government spending of course.
Mike “Mish” Shedlock
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