Opinion

Paul Taylor

Euro crisis tests limits of “French exception”

Paul Taylor
Sep 17, 2012 07:02 UTC

PARIS (Reuters) – The French consider themselves an exceptional lot. With much of the world’s finest food, wine, landscape, architecture, literature and arts, it’s hardly surprising.

But the French economic exception faces a reality check almost three years into the euro zone’s sovereign debt crisis.

France’s enduring ability to defy economic gravity – adding new taxes on top of one of the highest fiscal burdens in Europe, preserving short working hours, job protection, early retirement and generous welfare benefits – is about to be tested.

President Francois Hollande has promised to bring the deficit down to 3 percent of gross domestic product in next week’s 2013 budget from a forecast 4.5 percent this year.

Unlike many European peers, he plans to achieve two-thirds of the adjustment by raising extra revenue, despite a virtually flat economy, and less than a third by freezing public spending in nominal terms.

Analysis: Euro crisis tests limits of “French exception”

Paul Taylor
Sep 17, 2012 06:56 UTC

PARIS (Reuters) – The French consider themselves an exceptional lot. With much of the world’s finest food, wine, landscape, architecture, literature and arts, it’s hardly surprising.

But the French economic exception faces a reality check almost three years into the euro zone’s sovereign debt crisis.

France’s enduring ability to defy economic gravity – adding new taxes on top of one of the highest fiscal burdens in Europe, preserving short working hours, job protection, early retirement and generous welfare benefits – is about to be tested.

Euro zone advancing through obstacle course

Paul Taylor
Sep 13, 2012 10:13 UTC

PARIS (Reuters) – Europe has cleared more obstacles on the road to containing its sovereign debt crisis and stabilising the euro zone after Germany’s constitutional court allowed a permanent bailout fund to go ahead and the Dutch voted for pro-European parties.

Coupled with a European Central Bank decision to buy short-term bonds of states that apply for assistance and abide by strict conditions, and with EU proposals for a single euro zone banking supervisor, Wednesday’s ruling clears the way for a concerted effort to draw a line under the crisis.

However, there are still risks on the way to repairing the flawed euro construct, and Europe has yet to find a strategy to revive economic growth that would enable highly indebted states to reduce debt burdens and put the jobless back to work.

Analysis: Euro zone advancing through obstacle course

Paul Taylor
Sep 12, 2012 18:24 UTC

PARIS (Reuters) – Europe has cleared more key obstacles on the road to containing its sovereign debt crisis and stabilizing the euro zone after Germany’s constitutional court allowed a permanent bailout fund to go ahead.

Coupled with a European Central Bank decision to buy short-term bonds of states that apply for assistance and abide by strict conditions, and with EU proposals for a single euro zone banking supervisor, Wednesday’s ruling clears the way for a concerted effort to draw a line under the crisis.

However, political risks still lurk on the path to repairing the flawed euro construct, and Europe has yet to find a strategy to revive economic growth that would enable highly indebted states to reduce debt burdens and put the jobless back to work.

Euro zone enters dangerous week buoyed by ECB

Paul Taylor
Sep 9, 2012 09:58 UTC

PARIS (Reuters) – The euro zone enters a dangerous week, strewn with potential landmines, in a somewhat more optimistic mood after investors welcomed a European Central Bank plan to prevent a breakup of the single currency.

German judges, Dutch voters, IMF inspectors and Brussels regulators could all spring surprises that make it harder to resolve a sovereign debt crisis which is almost three years old and weighing on the world economy.

Wednesday is the main day to watch.

Germany’s constitutional court rules then on the legality of the euro zone’s permanent financial rescue fund, the European Commission unveils detailed plans for a euro zone banking union, and the Netherlands holds a cliff hanger general election.

ECB sets stage for euro rescue but will Spain jump?

Paul Taylor
Sep 6, 2012 17:28 UTC

PARIS (Reuters) – European Central Bank President Mario Draghi has delivered a roadmap for rescuing the euro zone from potential meltdown but the onus is now on Spain to swallow its pride and apply for help to bring down crippling borrowing costs.

Draghi met or exceeded market expectations by announcing on Thursday that the ECB was ready to buy unlimited amounts of bonds of up to three-year maturity of countries that request a European bailout and fulfil strict policy conditions.

The Italian ECB chief asserted his authority by isolating dissent from Germany’s Bundesbank, which publicly criticised the decision, while maintaining pressure on euro zone governments to pursue budget discipline and economic reforms.

Analysis: ECB sets stage for euro rescue but will Spain jump?

Paul Taylor
Sep 6, 2012 17:26 UTC

PARIS (Reuters) – European Central Bank President Mario Draghi has delivered a roadmap for rescuing the euro zone from potential meltdown but the onus is now on Spain to swallow its pride and apply for help to bring down crippling borrowing costs.

Draghi met or exceeded market expectations by announcing on Thursday that the ECB was ready to buy unlimited amounts of bonds of up to three-year maturity of countries that request a European bailout and fulfill strict policy conditions.

The Italian ECB chief asserted his authority by isolating dissent from Germany’s Bundesbank, which publicly criticized the decision, while maintaining pressure on euro zone governments to pursue budget discipline and economic reforms.

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