France’s Troubling Reliance on the Euro

01.03.2017 • The Economy

Olivier Perrin – The Brave Little Economist (Switzerland) –

Dear reader,

All the experts agree, if you leave the Euro, the new currency will be immediately devalued by 30% (or more, or less depending on the mood of your interlocutor).

Again, it’s a bit like predicting that you’re going to take 30 pounds if you divorce. Yes it’s possible.

The value of a currency is the confidence placed in it. You can be small as Switzerland and have a very strong currency or on the contrary large as China and have a weak currency.

If, on emerging from the Euro, France converted its new currency into gold, it betrayed the wealth of the State and began to generate a surplus, you can be sure that the new Franc would indeed be appreciated Strongly against the Euro and that the problem would be the opposite.

Of course, there is a bone here: to make a budgetary surplus , the last time it was 43 years ago. It seems that all this time we have had to forget how to balance a budget.

And why balancing a budget?

After all, Japan has twice as much debt as us and the Japanese do not live badly.

After all, Germany and Luxembourg balance their budget within the Eurozone.

Finally, let’s take advantage of this manna fallen from the sky – do the investors not want to invest in France for free or almost? What difference can it make to have 100 or 200% of debt when the debt is free?

Because it is there the poisoned gift of the Euro. The Euro is “Too big to fail”. Imagine the consequences for the world economy of a collapse of the Euro. When you are the government of the second economy of the Eurozone, you can do anything: they will fend you. At the worst they will send you the Troika. It’s even better, you no longer have to make the decisions.

The Euro is a morphine.

The high quality of the Euro, as controlled by the European Central Bank, is to ease the pain: The State can go into debt free of charge to honor its expenses. He can distribute his prebends and buy peace.

This quality makes it possible to face an acute crisis. No doubt the Euro avoided the chaos in Europe in 2008.

But just as high-dose morphine accelerates the death of the great sick, the Euro is suffocating our economies:

It allows us to import cheaply without fear of capital flight and weakens our industry.

It allows us to live far beyond our means without fear of our creditors.

It allows the state to capture 57% of the wealth created without worrying about the asphyxiation of our economy.

What does the State do with this fortune?

  • A primary school pupil “costs” € 5469 a year in the public but only € 3518 in the private sector – teachers and pupils there are treated less well? ;
  • Hospitalization costs an average of € 2115 per day in a public hospital compared to € 1,204 in a private clinic – are patients and staff less well treated?
  • Should I tell you about airline tickets? Of postal parcels? Of piggybacking? Of the catastrophic investments of the Public Bank of Financing? From the bankruptcy of retirement systems?
  • How is it that the after-sales service of a site that sells shoes at 10 € is impeccable while the least contact with a public administration is a calvary?

The problem is not the professors, the hospital staff, the civil servants, nor the contract staff. They work not less well in the public than in the private sector. The problem is the monstrous machine that has become the state whose monopolistic organization crushes the beneficiaries, users, employees, competitors …

The Euro was to bring about the free movement of goods and people by bringing down monetary borders. The reality is that by protecting states from bankruptcy and any competition between them, the Euro has given states a morbid monopoly on their economies .

There is not even the “fierce war” that we were promised to know who will be hosting the financial services that the Brexit may run out of London. In Paris, they are content to strut by praising art and the quality of life to the French. However, there are between 20,000 and 70,000 direct jobs and 1 billion euros in tax revenues, probably three times as many indirect jobs. France has already lost the insurance companies: We did not bother to meet the British insurers.

Our rulers have become junkies.

-Read more at (French)-

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