D I P L O M AT I C A | The European Union General government debt
This chart shows general government debt as a per cent of GDP with Estonia on the low end and Japan leading the pack in debt. 33 per cent to 25 per cent. He also wants to keep France’s generous 35-hour work week rules in place, but leave negotiations to companies about actual work hours of employees. Welfare benefits for low-wage earners will also be cut. Additionally, Macron has promised to cut the public-sector payroll by 100,000 employees, which will almost certainly put him on a collision course with France’s powerful public sector unions. At the same time, he wants to spend $66 billion in public investments over the next five years to rebuild France’s infrastructure. Macron will certainly have his work cut out for him though he is off to good a start by securing a majority for his own party in the French legislature. He now has the political heft to push through his controversial economic and labour reforms package. Only time will tell though if France’s powerful public sector unions who are deeply attached to the French welfare state will push back. The bigger question is whether Macron’s election in continental Europe’s second-biggest economy signal that the populist anti-globalization tide is over as voters take a cold, hard look at their pocketbooks? Like the tide, it is going out, at 20
D o e s [French President E mm a nuel] Ma cron’s e l e ction in contin enta l Europ e ’s second-bi g g est e conomy si g na l that the populist a nti-g loba li zation tid e is receding a s v ot ers ta ke a cold, ha rd loo k at th e ir pock etboo k s? Lik e the tid e , it is g oing out, at lea st for no w, but li k e the tide, it c a n come ro a rin g ba ck in if th e r e is not a fund a m enta l r e c a libration of econom ic polic y not just in Fra nce, but also other EU countries, including Germ a ny.
least for now, but like the tide, it can come roaring back in if there is not a fundamental recalibration of economic policy not just in France, but also other EU countries, including Germany. The good news is that the economy of the European Union is slowly crawling out of the doldrums of the past decade as consumer confidence recovers and the extraordinary monetary policies of the European Central Bank, which have involved large-scale quantitative easing and major asset purchases, continue to keep interest rates and inflation low. EU forecasts show that the economies of all member states will continue to grow over the next two years (1.6 per cent in 2017 and 1.8 per cent in 2018). Unemployment rates will also fall, though they remain well above the pre-crisis levels of the previous decade. The black mark on recovery is investment, which, in the polite words of European officials, “remains subdued.” Much of the EU’s growth forecast is predicated on strong economic recovery in the United States (which now seems to be in jeopardy as the presidency of Donald Trump stumbles and confidence in the U.S. economy tumbles) and growth in emerging economies, where a rapidly growing middle Summer 2017 | JUL-AUG-SEPT