International Economy Magazine:

Is France In Trouble?

was honored to recently be asked to contribute to a symposium of distinguished economists and geopolitical analysts commenting on the state of affairs in France. It has just been published in the Summer edition. The question posed to us was: What happens to the French economy—now struggling with high levels of both public and corporate debt—if the European Central Bank follows its narrow mandate and raises short-term interest rates in an attempt to hit a 2 percent inflation target? The ECB could face a situation where securing the state’s solvency takes priority over fighting inflation, forcing the central bank to monetize public debt.

My response is a simple but resounding yes. France’s current economic outlook is both complex and worrisome, compounded by simmering and seemingly intractable political tensions. With an anemic 0.8 percent growth forecast and non-financial corporate debt near 155 percent of GDP, France is truly the sick man of Europe.

You can read my full piece, along with the superb contributions of others, by going to the latest edition of International Economy Magazine HERE (the paywall is down).