Monday, July 16, 2012

Edward Hugh on France's economic prospects

"My view is France is far from being a "basket case", and is capable of implementing reform in a way which is different from much of Southern Europe. Look at the fact they didn't have a property bubble when Spain and Ireland did. Their banks were better regulated, it's as simple as that.

France may have a large state sector, but so does China. maybe people don't like that, but it isn't clear what this means for the long term growth rate.

In fact, France has a lot better demographic profile than Germany and the economy - despite the current account deficit - is more balanced with domestic consumption.

My bet: France is as much core Europe as anyone (more so than Finland or Holland imho) and the biggest risk to the French sovereign is from an Italian default."
Here's a chart from Edward:

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