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from Breakingviews:

France’s housing slump is sign of deeper woes

By Pierre Briançon

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

François Hollande could live with a housing bubble. That would at least signal euphoria in a significant part of the French economy. But house prices are declining, a reflection of the depth of the country’s economic woes, and its president’s inability to address them.

Average house prices dropped 1.4 percent nationwide over the last year, and fell 1.6 percent in the Paris region. The decline is uncharacteristic. High and ever-rising house prices have long troubled French governments. But the current situation has nothing to do with Hollande’s policies. On the contrary, his clumsy dirigisme has discouraged new housing investment, thus preventing prices from falling even further.

It would have been worse without declining interest rates. According to industry sources, the average rate on a mortgage is now 2.7 percent, down from more than 3 percent a year ago. Even with cautious banks, as they are now, low rates should be a significant incentive in a country where fixed-rate mortgages are standard. But buyers aren’t rushing in. Parisian flats sometimes can’t find takers, and the few buyers can routinely negotiate previously unheard-of discounts of up to 20 percent.

from Breakingviews:

U.S. farm credit looks safer than houses

By Daniel Indiviglio and Kevin Allison

The authors are Reuters Breakingviews columnists. The opinions expressed are their own. 

The $200 billion-plus U.S. farm credit system looks safer than houses. Washington’s implicitly backstopped agricultural lending complex resembles its ill-fated housing finance counterpart in some ways, complete with a rural equivalent of Fannie Mae and Freddie Mac. That’s cause enough to scrutinize Washington’s little-known farm lending apparatus. But despite a hot land market, the system looks ruggedly capitalized enough to avoid a similar fate.

from Edward Hadas:

Time to retire unemployment

Edward Hadas

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Give Janet Yellen credit. The chair of the U.S. Federal Reserve is keen to use monetary policy to help get more people into good jobs. Her priority – work is more important than finance – is reflected in the subject of this week’s get-together for the world’s central bankers: “Re-Evaluating Labor Market Dynamics.” One item should be on the agenda of the distinguished guests at Jackson Hole, Wyoming: how to replace the concept of unemployment.

from Edward Hadas:

Do autocrats and strong economies go hand in hand?

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By Edward Hadas

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Are authoritarian governments bad for the economy? Turkish voters do not seem to think so. On August 10, Tayyip Erdogan won an absolute majority in the country’s presidential election. Observers say that the country’s increasing prosperity is a big part of his AK Party’s appeal. Erdogan is not the only popular authoritarian around. Viktor Orban, who reportedly endorsed “illiberal” government, wins similar majorities in Hungary. If Russia had an election today, President Vladimir Putin would win big. And Xi Jinping, who seems to be making one-party rule in China more authoritarian, would undoubtedly triumph if the government bothered with elections.

from Breakingviews:

Pure politics can’t revive Italy’s coma economy

By Neil Unmack

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The minus sign in front of Italy’s latest GDP number was a reminder that Europe’s fourth-biggest economy remains stuck in a perma-recession. GDP has hardly increased in the last 15 years, and the 0.2 percent decline in the second quarter was the 11th fall in the last 12 periods. Matteo Renzi, the new prime minister, has offered only political changes. For the economy, much more is needed.

from Hugo Dixon:

UK prepares for possible EU failure

David Cameron looks to be preparing for the possibility that his plan to renegotiate Britain’s relationship with the European Union will fail. The UK prime minister would then campaign for the country to quit the EU in a referendum he plans to hold by 2017. That seems the best way to interpret his appointment of a eurosceptic foreign minister and the nomination of a little-known former lobbyist as Britain’s European commissioner.

This is not to say that Cameron wants to take Britain out of the EU – which would be a historical mistake. It is rather that he apparently thinks quitting could be an acceptable Plan B that would keep him in his job and his Conservative party reasonably united.

from Breakingviews:

China’s corruption purge nears tricky second phase

By John Foley 

The author is a Reuters Breakingviews columnist.  The opinions expressed are his own.

China is entering the second stage of its colossal fight against graft. Nabbing high-profile culprits was a good start. Now, other miscreants have to believe the same could happen to them. Finally, the rewards for good behaviour must be made comparable to the spoils of wickedness. From here, things get tougher.

from Breakingviews:

Close presidential race may slow Indonesia reforms

By Andy Mukherjee

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Indonesia’s tight presidential race could diminish the country’s chances of finding decisive leadership to execute urgent reforms.

from Breakingviews:

Sarkozy probe latest sign of sick French politics

By Pierre Briançon

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.  

France has sunk a little deeper into political paralysis with the corruption probe against Nicolas Sarkozy. The former president, who denies the charges, has been put under formal investigation for trying to convince a judge in France’s highest court to tell him about one of the many judicial probes of his behaviour.

from Edward Hadas:

The stupidity of student debt

By Edward Hadas

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The fast increase in loans to pay for higher education is a trend that is moving in the wrong direction. The idea that borrowing should play an important role in financing higher education, now standard thinking in the United States and the United Kingdom, is financially dangerous and economically wrongheaded.

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