Sunday, August 17, 2014

Growth and trust: France down – Press Center

Growth and trust: France down – Press Center

On track against economic odds, under the argument of truth: the executive no longer convinces French

Change policy in the face of failure. growth? “No way,” reaffirms Manuel Valls, judging even “irresponsible” who, increasingly noisy left, call for a different strategy.

“A spark

enough to inflame
social climate”

Prime Minister advocates again “a discourse of truth” and calls for patience French “The policy that the president has decided take time to produce results,” . And invoke the “Pact of responsibility and its 41 billion decline in the cost of labor will actually come out now”
Problem:. Executive faces distrust, even the exasperation of French. More than eight in ten have more confidence to effectively combat record unemployment, boost growth and reduce the deficit, according to an Ifop poll published in the Journal du Dimanche yesterday.
employment, growth, deficit: commitments of the Head of State was not required. Repeatedly promised, the “reverse unemployment trends” has fizzled. The growth was zero in the second as the first quarter. As for the deficit, it will be “greater than 4% of gross domestic product in 2014″ , admitted the Finance Minister Michel Sapin. The goal of a return to the European standard of 3% in 2015 is thereby irreparably damaged, forcing the executive to implore the mercy of Brussels and its European partners and seek a reorientation of EU policies for growth and employment.
Last commitment dated head of state, maintaining the fifth economic status of France in the world will be very difficult to hold.
Meanwhile, consistency or persistence, the government draws a avalanche of criticism. Jean-Claude Mailly, secretary general of the Workers Force, denounced the “error” , warning against a social climate “that a spark could ignite.” Prime Minister expresses “desire for consistency, continuity for results” , opposes Does one in the entourage of Francois Hollande, however considering that “measures Further to energize and liberate growth “. Expected.

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Deflation, “a spiral infernal “

At first glance, the price decline appears to be a good thing from the point of view of consumers … For economists, this is a red alert. Because when prices fall over time, households expect hoping to do better business. Result, there is less demand and therefore too many products on the market. So, business activity decreases, wages and employment suffer … And consumption is declining as a result. All of which leads to the economist Bertrand Martinot on RMC that “deflation is a downward spiral.”
In France, we are not there yet, but the signals are flashing. In July, the index of consumer prices fell 0.3% after three months of stability. In one year, inflation (rising prices) is very low (0.5%). To curb this trend could lead to deflation, we need a revival of growth and therefore consumption and investment. Charging the government to restore confidence among consumers and investors by convincing measures.

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