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It was well received everywhere by the chattering class. But "real economists" were flabbergasted: see 'France by the Numbers' on Mart Thoma's Economist's View.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Sat Feb 8th, 2014 at 07:27:36 PM EST
[ Parent ]
It shows Hollande cravenly caving in to the prejudices of the great wealth holders in Europe. Not only does he have little comprehension of economics, but neither does he show any integrity towards the interests of his electorate. Perhaps he dimly apprehends that he has blown it with his base and just hopes to be well treated by the wealthy in retirement.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sat Feb 8th, 2014 at 11:59:50 PM EST
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I don't know about craven but it is a total capitulation of France, possibly an act of desperation by a President that has squandered his popularity at a staggering pace, and the final death knell of the European social-democratic establishment as a progressive force.

Wolfgang Münchau: The real scandal is France's stagnant economic thinking (FT.com, January 19, 2014)

First, when you try to solve a shortage of aggregate demand through supply-side policies, the results are not going to be any different in France than they were elsewhere. Some targeted structural reforms such as the introduction of a single labour contract would indeed be a good idea because it could help bring down youth unemployment. But this is not going to happen. Mr Hollande's reforms are of the tax-cut and spending-cut variety. Do not romanticise his U-turn two years into his term and compare it with François Mitterrand's similarly-timed adoption of the "franc fort" policy in 1983. The purpose of the Mitterrand's decision was to allow France to coexist in a semi-fixed exchange rate regime with West Germany. It was a political choice of macroeconomic adjustment, not one of supply-side voodoo and ideological convergence.

...

The French policy shift will have an immediate impact on the eurozone periphery. If France goes to the trouble of aligning with Germany on German terms, expect no mercy for others. The message of righteousness will be broadcast in stereophonic quality.

The third significance lies in the fact that the new consensus spans the entire mainstream political spectrum. If you live on the European continent and if you have a problem with Say's Law, the only political parties that cater to you are the extreme left or the extreme right.



A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Sun Feb 9th, 2014 at 04:24:19 AM EST
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Münchau:
The purpose of the Mitterrand's decision was to allow France to coexist in a semi-fixed exchange rate regime with West Germany. It was a political choice of macroeconomic adjustment, not one of supply-side voodoo and ideological convergence.

However, Hollande's choice is, at bottom, the same: monetary co-existence with Germany, or, more broadly, the absolute rule of French policy is that France's lot is cast in with Germany. That choice gives France no room to manoeuvre. The "suppy-side voodoo" is an attempt to put a varnish on an indeed desperate scheme to mimic Germany's past social "reforms" (even down to inviting Peter Hartz).

by afew (afew(a in a circle)eurotrib_dot_com) on Sun Feb 9th, 2014 at 04:54:31 AM EST
[ Parent ]
The Euro is not a German plot for world domination but a French self-goal.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Sun Feb 9th, 2014 at 01:05:59 PM EST
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You re totally right, it s pretty unbelievable that our elites have been so eager to drop a currency/system they had control on for the DM basically.I am still at lost to understand what they were really trying to achieve.

The Franc Fort Policy - EuroDM has condemned two generation to be stuck in life for no good reason, with politicians "forced"( but do they even realize it?) to rewrite the same policies (Austerity/desindustrialization/vicious cycle) again and again.

it would be a joke if is was not so sad that only the FN seems to have a clue on what s happening and what to do to return to growth/get out of the cycle( the UPR is pretty spot on on it but irrelevant).

by fredouil (fredouil@gmailgmailgmail.com) on Thu Feb 13th, 2014 at 06:46:25 AM EST
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