Why is France so Glum?

The latest data from the Markit PMI survey tells a bleak story in Europe. That is not much of a shock, but it is nonetheless depressing, as there had been some faint hope that there would be stabilization at least. It is this kind of data that is feeding the anti-austerity troops and encouraging those who want to find some way to accelerate stimulus.

While the press and population have been disillusioned when it comes to its assessment of Francois Holland, it is worth questioning why France is so downbeat and critical. It is obvious that there are problems and reason for concern in France but, compared to many of its neighbors, the French are doing far better.

The country has a debt-to-GDP ratio of 90% -- Italy is at 125%, and the US is a little over 100%. The budget deficit is around 3.7% of GDP. While higher than the target set by the Hollande government, Britain is at 7.4%, and the US exceeds 5.5%. Meanwhile, the unemployment rate is uncomfortably high at 10.6%, but Spain is twice that. This is not to say that all is well in France, still the fifth largest economy in the world, but the ferocious sense of despair doesn’t really seem to be justified.

-Armada Corporate Intelligence

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