France’s Infrastructure Is Crumbling Despite Taxes at 56% of GDP

01.02.2018 • France

Simone Wapler – La Chronique Agora (France) –

Rates are rising, the debt is more expensive and France lives beyond its means. It will have to very quickly find a real solution to unemployment.

The most taxed country in the world can no longer properly maintain its road network. This is in black and white in the latest Infrastructure Orientation Council report, which was handed out today to Minister of Transport Elisabeth Borne.

France is a pretty girl who buys makeup on credit but does not resemble her shoes.

The Council has the solution: more taxes, more vignettes … just like the Court of Accounts which had recently looked at real estate. As soon as an administration of our country makes a report, its conclusion is invariable: it would require more means, more taxes, more influence of the State on our money and less control of our share of our income.

Where is the limit in a country where 56% of GDP is already in the hands of the state?

The French crushed by taxes but France insolvent

Despite the very optimistic comments made in the major media about the dynamism found in France and its aura in the world, for the Germans our solvency does not improve. An article from the Welt echoes a concern and disseminates a study of the CEP .

Macron

“A look at creditworthiness shows that many nations are living beyond their means. Above all, the hope that France arouses seriously worries economists.

Die Welt

While the euro zone as a whole seems sound and stable, “the solvency of each of the countries of the monetary union is changing very differently”.

The study recalls some basic principles.

Solvency is assessed as the ability to repay loans.

If debt increases faster than investments or investments decline, a country consumes its capital and its credit rating falls.


“Since 2014, the solvency of France declines again.
The CEP has classified countries according to these principles.
Cyprus, Italy, Greece, Slovenia and Latvia are at the bottom of the pack. But right behind, we find France.

This observation is in sharp contrast to the perception of politicians and financial markets, the CEP admits. But the facts are there. The French economy has been dependent on foreign loans since 2005, particularly for consumption, and this dependence is increasing.

To increase the solvency of the country, the French should reduce their level of consumer spending which represent 97% of disposable income, against an average of 93% for the 19 European countries.

“The most socially acceptable way to do this is to increase overall income, for example by reducing unemployment.”

Well, yes, the Germans are not famous for being the specialists of humor …

Is there a “socially acceptable” solution to reduce unemployment?

It will quickly have to find a way. Because the rise in long rates continues. Debt interests are becoming increasingly expensive around the world. Like it or not, it’s the 10-year-old American who remains the standard in this area.

Bloomberg on this subject:

”  However, the beginning of 2018 has taken many investors by surprise with the 10-year yield experiencing its biggest monthly increase since November 2016. Suddenly, they find themselves thinking about what level could end the euphoria of the good times since the presidential election. For many, 3% is the breaking point at which corporate financing costs would become too high, equity markets would lose their attractiveness and growth momentum would fade . “

In summary, at 3% the global pyramid of debt collapses.

Here are six precautionary measures to take as a matter of urgency to protect you when the crisis occurs.

-Read more at la-chronique-agora.com (French)-

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