France to take ticket on bailout express
10 Aug, 2011 06:14
President Sarkozy has pledged to stick to deficit-cutting goals amid the latest speculation the French economy is on the brink of a downgrade. He has interrupted his holiday after criticism for staying away while turmoil grips financial markets.
The French government will announce new decisions aimed at remedying a budget imbalance on August 24, Finance Minister Francois Baroin said on Wednesday. The minister assured that Nicolas Sarkozy and the cabinet are firm in their intention to attains deficit-reduction objectives, reports Associated Press.France may lose its AAA status following the EU Central Bank chief's warning that Europe’s financial system is in its worst state since World War II.On Tuesday, European markets bounced back after a day of volatile trading on the stock markets but now, after the US, the French are next on the credit agency hit lists to surrender their top rating.“France is probably going to lose its AAA status,” acknowledges Pieter Cleppe, from Open Europe Think Tank.Known for its light 35-hour working week, economists say the real reason why France, like some of its EU neighbors, is in trouble is that they do not work hard enough.As Pieter Cleppe says, “The basic idea is wealth is coming from heaven, and Europeans are somewhat entitled to wealth without actually doing something about it.”The EU dream is becoming a nightmare, as citizens demand better services while working less.In fact, experts consider there are just three states that deserve to be in the eurozone.“Only Germany, the Netherlands and Belgium can share the same currency without having economic costs,” Ivan Van De Cloot from Itinera Institute, estimates.Those nations now lead a growing resistance against fellow members.Opposition to the bailouts centers on three issues: people do not want to pay for others' mistakes, they have not been consulted, and the money does not even seem to be helping.Italy this week became the latest country to bring out the begging bowl. But it needs to deal with its own problems, economists say.Peter De Keyzer, Chief Economist at BNP Paribas Fortis, states, “Italy is uncompetitive, Italy is growing relatively slow.”Italy and Spain have announced spending cuts, but it is feared they are nowhere near enough to balance the books.The EU citizens are being tricked into picking up the tab, say analysts. Italy and Spain's debt is being bought by the European Central Bank because ordinary people cannot grasp their fancy methods. Yet the ECB is funded by Europe's taxpayers.“They don’t want to pay for these lousy Greek and Spanish people, but when they use the ECB nobody understands it,” Ivan Van De Cloot says.French Finance Minister François Baroin's backed a bigger EU bailout fund.As fears grow that France is next in line, a bailout looks a wise move, but by then, the last remaining careful states may have already had enough.