France Economy Stagnates with no Further Growth

The socialist president of France, Francois Hollande, has recently announced his intentions to stick to a fiscal program that he released in January, even after returning from his vacation to find that the country’s economy has remained stagnant, and fewer French citizens than ever before believe his policies will be able to fix the situation.

It is too bad they ever voted for him according to many people who understand business.

During Hollande’s short break:

The socialist president of France, Francois Hollande, has recently announced his intentions to stick to a fiscal program that he released in January, even after returning from his vacation to find that the country’s economy has remained stagnant, and fewer French citizens than ever before believe his policies will be able to fix the situation.

It is too bad they ever voted for him according to many people who understand business.

During Hollande’s short break:

France has recorded yet another consecutive quarter of no further economic growth

The government has had to cut down its forecast

The government has been forced to give up on a target of deficit-reduction

The unimpressive performance of the French economy has sparked arguments on the left which suggest that the government should be putting more effort into supporting households, while other business leaders believe that it should be doing more to assist them, instead. However, Mr. Hollande argues that he will not go beyond any existing spending-cut or tax plans.

Attempts to improve the economy

Hollande has suggested that he is willing to go ‘faster and further’ in reforms, attempting to improve France’s economy, which has ground to a worrying halt so far. He believes that he should stick to the main basis of his economic policy, the responsibility pact, even in spite of the criticism being directed towards him across the spectrum of politics.

The responsibility pact provides tax breaks to businesses of approximately forty billion euros in exchange for those companies creating approximately half a million jobs over the coming three years. Hollande hopes to finance this with around fifty billion euros in spending cuts, which he hopes will help to modernize the economy in France.

A socialist wants to cut government spending? Perhaps those business leaders better get that in writing.

The issues with the current plan

At this point, with the president attempting to regain initiative through his pro-business shift that was revealed at the beginning of the year, little is happening in the way of positive results. The original plans have not had a great deal of impact, and mounting criticism suggests that the economy only has further to fall.

How stop taxing the hard workers and the job creators so much? Many business leaders know that will help the economy.

Members of Hollande’s own socialist party suggest that the tax cuts being provided for businesses are currently far too generous, and they believe that the plans to cut public spending by approximately €50 billion throughout the next three years, will only cause additional damage to an already aching economy. These are the same forces that have bankrupted Detroit, LA, Italy, California, Spain, and so on though. What credibility do they have?

However, at the same time, Hollande is being pushed to transition into another direction by the EU, being required to meet fiscal rules that demand him to cut spending this year and the following, in order to push the deficit down.

Hollande―see what Texas is doing!

Recently, Hollande granted some concessions to the left side of his party by stating that he would find a way to lower taxes for low-income houses in the country, after the constitutional court disregarded his initial plans. However, he has also asked for patience from his party, warning that they must stick together or face defeat in the future elections.