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Why France not Greece is the big worry

Wednesday, February 25, 2015 - 02:01

The European Commission has granted France until 2017 to bring its budget deficit below the EU limit of 3 percent of GDP. The decision will be a relief for Paris but as Ivor Bennett reports some still see France not Greece as the euro zone economy's biggest worry.

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The latest edition of Charlie Hebdo has hit the shelves. It features pictures of the Pope and France's far-right leader Marine le Pen on the front cover under the headline "Here we go again!" It's seven weeks since the satirical magazine's journalists were targetted by Islamic gunmen and a lot has changed since then. The President's poll rating for one has been boosted and so too has consumer confidence. In February it hit its highest level in nearly three years. It's another sign the euro zone's second largest economy is lifting itself slowly out of stagnation. But IronFX's Marshall Gittler says there's still a lot more work to be done. (SOUNDBITE) (English) IRONFX, MARSHALL GITTLER, SAYING: "Unemployment is over 10 percent, industrial production is falling, the manufacturing PMIs have been negative for quite some time or below 50 for quite some time. The economy does seem to be having serious problems and, unlike Greece, showing no effort at reforming." Greece has been a welcome distraction for France in recent weeks - the new edition of Charlie Hebdo even carries an interview with the country's new Finance Minister. But it's currently back at the top of the European Commission's agenda. It's just agreed to give France until 2017 to get its budget deficit below the EU limit of 3 percent of GDP. Paris has repeatedly missed similar deadlines in recent years ETX Capital's Joe Rundle isn't surprised. (SOUNDBITE) (English) ETX CAPITAL, HEAD TRADER, JOE RUNDLE, SAYING; "It has got a very high social welfare bill and it is not really firing on all cylinders and we probably need to address how France is dealt with and Spain and Italy." French households were a little more optimistic about their future standard of living in February. But the figures remain well below the long-term average. Consumer spending has also contracted - and that was once the driving force behind France's 2 trillion euro economy.

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Why France not Greece is the big worry

Wednesday, February 25, 2015 - 02:01