European Reality Check

[nickndfl]

The euro was recently replaced by gold as the #2 global reserve asset. FACT.What else do you need to know?

 

[Viking]

The euro was recently replaced by gold as the #2 global reserve asset. FACT.What else do you need to know?

I replaced all my Euro years ago. I guess I’m just ahead of my
time.

 

[SilverStacker]

Well I'm rooting for Eastern Europe to succeed, to keep their defense budgets high, to be an example for those still under the Russian boot.

And thats the real reason for the Ukraine war. Putin is terrified that Ukraine has every thing going for it to succeed once dialed into the EU and becoming an economic juggernaut, what with its riches in food production, off shore oil and gas, and rare earth minerals in its soils, and a motivated work force. Under Democracy it would become a beacon for the failed states in the Russian Federation like Poland and the Blatic states are.

So Putin bombs them, invades them, try's to cripple their economy. Yet Ukraine keeps chugging along as its people refuse to give up and the Euro/NATO Nations at least appear to be resolute in their military spending. As well they should be. Russia has a bad History of aspiring to enslave and build Empires, dragging the conquered into mires of stupid economic policys that usually leave them in economic anguish. Like Joe Stalins stupid 1930's era economic policys in Ukraine. He forced entire tribes to relocate and then the rest he had starve when he stole the small plot private farms that were so productive and forced the stupid collectivization of farms into state owned entity's. The idea was bad enough but the execution of the policys were even worse. Thus in 1932/33 the mass starvation of Ukrainians called the "Holodomor" occurred and while nobody can agree how many died from it the numbers being in the millions are not argued with.

Nor can it be agreed if the murder was intentional or simply bad policy executed poorly. What is known is that Joe Stalin considered private ownership of land to be a personal threat. Most of all if that land is productive farm land. And these memorys of regime boots on their neck are still fresh on the minds of Ukies so I dont blame them for fighting these creeps to the death for a country of their own. Nor do I blame the Nations of Eastern Europe for gunning up. And America needs to back them.

 

[Cigarlover]

When Ukraine split from Russia they were to remain neutral, give up their nukes and no NATO involvement. When Kamala said Ukraine would be fast tracked into NATO that started the conflict.
This was all the doing of the neocons in DC. They have always wanted war with Russia and Russia has always wanted an acceptance by the west to openly do business with us and be a world playa. At stake is 75 trillion in resources in Russia.

This ends one of 2 ways. Either Ukraine honors the agreement that was in place and remains a non member of NATO or they get nuked. If the rest of Europe and the US want to join in then they get nuked as well. I dont see Russia ever giving up and they definitely won't lose this war. To lose the war is to give up their country and they understand this very well.

So far Russia has shown a lot of restraint. They have everything they need to defend themselves. The US spends a trillion a year on the war machine. They spend 100 billion. As a nuclear power we are pretty much equals. They know that and so do we. The only deal that can be generated here is to get the CIA installed Zelenski to back down and honor the minsk agreement.

 

[nickndfl]

Stalin had the best hair of any dictator in 500 years.

 

[searcher]

This one is a bit political.

Europe’s quiet power blocs: The new relevance of Visegrád and the Baltic Triangle - Euractiv

Brussels often treats regional groupings as distractions – parallel bureaucracies or political irritants. But far from threatening the Union’s cohesion, they are accelerators of its strategic capacity.

www.euractiv.com

 

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[searcher]

 

[searcher]

 

[pmbug]

France is not Greece.
It cannot be bailed out.
Greece implemented supply-side reforms and recovered.
In France, the government will not cut spending or taxes.
France's unfunded liabilities are as large as Greece's relative to GDP, but massively larger in absolute real terms.
France's interventionism is much worse than Greece's.

France is not Greece. It is worse.

12 Sep 2025: Fitch Ratings has downgraded France's Long-Term Foreign-Currency Issuer Default Rating (IDR) to 'A+' from 'AA-'. The Outlook is Stable.

A full list of rating actions is at the end of this rating action commentary.

Key Rating Drivers

The downgrade reflects the following key rating drivers and their relative weights:

High

High and Rising Debt Ratio: France's general government debt ratio will continue to rise, reflecting persistent primary fiscal deficits. Fitch projects debt to increase to 121% of GDP in 2027 from 113.2% in 2024, without a clear horizon for debt stabilisation in subsequent years. France's 2024 debt ratio, already double the 'A' category median, was 15pp above its 2019 level and is now the third highest among sovereigns in the 'A' and 'AA' rating categories. France's rising public indebtedness constrains the capacity to respond to new shocks without further deterioration of public finances.

Political Fragmentation Hinders Consolidation: The government's defeat in a confidence vote illustrates the increased fragmentation and polarisation of domestic politics. Since the snap legislative elections in mid-2024, France has had three different governments. This instability weakens the political system's capacity to deliver substantial fiscal consolidation and makes it unlikely that the headline fiscal deficit will be brought down to 3% of GDP by 2029, as targeted by the outgoing government.

We expect the run-up to the presidential election in 2027 will further limit the scope for fiscal consolidation in the near term and see a high likelihood that the political deadlock continues beyond the election.

Weak Fiscal Record: France has a weak record of fiscal consolidation and compliance with EU fiscal rules. There have been past periods of fiscal tightening, but the headline fiscal deficit has exceeded 3% of GDP in all but three of the past 20 years, and there has not been a primary fiscal surplus since 2001.

High 2025 Deficit: The 2025 budget targets a fiscal adjustment of 0.7% of GDP, of which more than half derives from temporary revenue-raising measures, including exceptional levies on large corporations and high net-worth individuals. Fitch projects a 2025 fiscal deficit of 5.5% of GDP, close to the government's 5.4% target, and down from an outcome of 5.8% of GDP in 2024. However, the 2025 figure remains high compared with the projected eurozone median deficit of 2.7% and 'A' median of 2.9%.

Uncertain Fiscal Consolidation Path: Fitch forecasts France's fiscal deficits will remain above 5.0% of GDP in 2026-2027. This incorporates Fitch's assumption of consolidation measures of about 0.5% of GDP per year, offsetting higher interest costs and increased defence spending. We assume upcoming budget negotiations will produce a more diluted fiscal consolidation package than that proposed by the outgoing administration, and failure to pass a budget before year-end could trigger a period of 'services votés', during which no new discretionary consolidation measures could be implemented.

Fiscal Rigidities: The high tax burden and high share of structural spending make sustained fiscal consolidation challenging. France's tax-to-GDP ratio is the highest in the EU at 45.6% of GDP compared with an EU average of 40% (2023, Eurostat), leaving limited scope to raise taxes further. Efforts to curb social expenditure through structural reform over the past decade have had limited results and faced substantial political and social opposition. Despite reductions in housing and unemployment benefits, streamlining of healthcare expenditure, and labour market reform, France has struggled to reduce overall social spending, which is at 32% of GDP (EU average of 26%).

France's 'A+' IDRs also reflect the following key rating drivers:

Credit Fundamentals: France's ratings are underpinned by its large, diversified high-income economy, with per capita income and governance indicators well above the median for 'A' category peers. These strengths are complemented by strong institutional quality, eurozone membership, a sound banking sector and excellent access to financing with a diverse investor base. Its ratings are weighed down by high and rising debt, a socio-political context that makes fiscal consolidation hard and low potential growth, similar to many other euro area countries.

Modest Growth Outlook: Fitch's real GDP forecasts remain unchanged. We project real GDP growth of 0.6% in 2025, 0.9% in 2026 and 1.2% in 2027, reflecting low trend growth we estimate at 1.1%. France has only moderate direct exposure to US trade, but the indirect impact of the 15% EU wide tariffs imposed by the US will weigh on growth. Domestic demand will drive GDP growth. The current political and policy uncertainty may weigh on economic sentiment, but France's high household savings rate and strong corporate balance sheets should support consumption and investment, particularly in the now low inflation environment.

Sound External Finances: France's net external debt of 36% of GDP in 2024 largely reflects its role as a major debt issuer in global markets. A positive net foreign direct investment position of around 15% of GDP underscores the global reach of French multinationals and their capacity to absorb external shocks. We project the current account will remain close to balance, reflecting resilience in services exports and lower energy import bill.

ESG - Governance: France has an ESG Relevance Score (RS) of '5[+]' for Political Stability and Rights and the Rule of Law, Institutional and Regulatory Quality and Control of Corruption. These scores reflect the high weight that the World Bank Governance Indicators (WBGI) have in our proprietary Sovereign Rating Model. France has a high WBGI ranking at the 80th percentile, reflecting its long record of stable and peaceful political transitions, well established rights for participation in the political process, strong institutional capacity, effective rule of law and a low level of corruption.
...

More:

https://www.fitchratings.com/research/sovereigns/fitch-downgrades-france-to-a-outlook-stable-12-09-2025

Deep dive on France debt situation:

France’s moment of peril as a debt mountain fuels a political crisis

Sébastien Lecornu, France’s fifth prime minister in two years, faces what some consider an impossible task

www.irishtimes.com