Quote (Djunior @ 23 Jul 2020 09:34)
Boatloads of cash wasted and that's what the frenchies have to say?
You guys should wake up to the fact that the southern economies cannot compete. Continuous devaluation is why there were almost 2K italian lira to the euro for example.
Not cash injection is expected soon. Pay up suckers ^^
What you dont understand is that France is a part of the Southern countries who want/need to run on a soft currency. Macron/France is very happy about the results of the EU summit since they hope that the joint debt issuance creates a precedence and is the first step toward establishing what they euphemistically call "fiscal union", actually meaning debt and transfer union. Tldr: they desperately need German money.
The background is that France is unable to reform its labor market/social security system/economy, as seen by Macron's struggles with the Yellow Vests (and similar failure to push through reforms by all his predecessors). France cannot finance its current model in the long run. Before the Euro currency union, they could devalue their previous currency, the French Franc, but that's not possible anymore. They suffer from the same problem as Italy, Greece and Spain. Instead of pushing through reforms that would be political suicide for him, he hopes to tap into German (and Dutch and Austrian and Finnish, but mostly German) money so that France can continue running its uncompetitive model without the need for painful reforms, at the expense of the taxpayers in the financially solid Northern Eurozone states (GER, NL, A, F).
Just for the record: the Franc has always been a soft currency, between 1953 and introduction of the Euro in 1999, the French Franc had lost a whooping three quarters
of its value relative to the German Deutschmark. https://fxtop.com/de/historische-wechselkurse.php?A=1&C1=FRA&C2=DEM&DD1=&MM1=&YYYY1=&B=1&P=&I=1&DD2=22&MM2=07&YYYY2=2020&btnOK=Gehen
Another factor that explains why France wanted these "corona bailouts" is that French banks are by far the most invested in Italy. If Italy ever went down financially, French banks, and in turn the rest of France, would be the next domino to fall. France went out of the compromise deal as a net transfer recipient anyway, but even if they had on paper been a net contributor, it would still have been worth it from a French perspective. An example with arbitrary numbers to illustrate this: say the French government ends up paying a net €10b in some EU or Eurozone bailout scheme, but foul credits in the books of French banks with a volume of €40b are rescued by this bailout - that's still a very good deal for France, even if they are a net contributor on paper.This post was edited by Black XistenZ on Jul 23 2020 02:20am