Paris, or carƏ…
(… intense and profitable day of work in Milan, I come home tired but I won't give up sharing a couple of observations with you, observations of merit, but above all of method …)
France has been talked about a lot here. Of its more ( Austerlitz ) or less ( Azincourt ) glorious history, of its literature, which has helped us to overcome difficult moments , to understand and to pity , but above all of its twin deficits, which allow us not to be surprised by what is happening in these hours.
Hollande today no one remembers who he is. His party has been flattened by history. As no one knows that this outcome had not been foreseen, in this blog that does not exist, ever since the European left was all rejoicing at the advent of its new standard bearer!
But we didn't say how it would end. ..
Then Macron arrived, and we, if we existed, could have said that we expected from him what we had expected from Hollande .
But in short, I won't go on too long: the posts on France are all here , if you want to read them, but their summary is and remains the one we (didn't) write a year after Macron's first election :
The twin deficits (public and foreign) leave no way out for the French government, for any French government: impossible to reduce the public one without unleashing an angry reaction from the population, but impossible to reduce the foreign one without reducing the public one.
Tremendous COVID and supply shocks don't change the picture much:
Even today, we will return from the foreign deficit tomorrow!
I don't know if you remember the rosy picture that was painted in 2018:
How much convergence appeared in the IMF's forecasts!
But if this convergence hasn't taken place, the fault isn't the war, the famine, the drought, the locusts. The fault lies with what prevents France from rebalancing the relative price of its goods and services without resorting to austerity policies (the last of many: pension reform).
We have talked about it many times, I don't have the time or the strength to explain the details of these graphs to newbies, which I hope will be sufficiently legible for others. My job is no longer to explain the obvious: it's to prepare for when he chooses an alternative path, after unsuccessfully trying to get into people's heads.
(… good night! …)
This is a machine translation of a post (in Italian) written by Alberto Bagnai and published on Goofynomics at the URL https://goofynomics.blogspot.com/2023/03/parigi-o-car.html on Mon, 20 Mar 2023 22:39:00 +0000. Some rights reserved under CC BY-NC-ND 3.0 license.