France

Parliamentary success will rob Hollande of excuses

11 Jun 2012

The Socialist domination of parliamentary elections in France should give the new president a free hand to act. He can continue to ignore the causes of the economy’s woes, or tackle structural reforms head on. But market and German pressure may not leave him much choice.

France’s state sector pay cap is necessary folly

31 May 2012

The French government is about to force a 1-to-20 remuneration scale in state-owned companies. This means that most of their CEOs will have to take a serious pay cut. The measure doesn’t seem to make much sense. But it is needed to make austerity more palatable.

France makes most of German virtues, Greek vices

25 May 2012

France is enjoying a good crisis and its funding costs are at record lows. The rally owes much to fears of a Greek exit, which are pushing German yields to surreally-low levels and make French bonds attractive. But this won’t last much if Hollande’s policies disappoint markets.

French-German euro bond clash isn’t serious yet

23 May 2012

François Hollande likes them and Angela Merkel doesn’t. But the leaders are unlikely to clash on the need for euro bonds - at least for now. Both know the bonds won’t solve the immediate crisis. And before they can disagree, they must clarify what they’re arguing about.

Hollande’s economic team won’t rock euro boat

17 May 2012

The new French president has picked experienced politicians as finance and budget ministers, and his economic advisers are a no-nonsense group. Hollande’s choices won’t worry France’s euro allies. The question is whether the new team will push for domestic reform.

Hollande-Merkel agenda is more Greece than growth

15 May 2012

The French president is flying to Berlin on his inauguration day to meet Angela Merkel. Hollande won’t just try to smooth things over with the German chancellor on fiscal discipline. The Greek crisis has forced the leaders of Europe’s two largest countries to brace for the worst.

Germany gives lesson in "free lunch" economics

15 May 2012

Strong technology and labour reforms keep making Germany richer - a quarterly 0.5 percent GDP increase is the latest sign. The rest of the world also gains from strong German exports. But trade surpluses bring credit losses and political spats, especially in the euro zone.

Hollande won’t have much time to learn on the job

7 May 2012

François Hollande, the new French president, faces the difficult task of translating his calls for more growth and less austerity into market-friendly policy. As Greece teeters on the brink of political chaos, his first international trial by fire will come quickly.

French banks hope to end balance-sheet shrinking

4 May 2012

BNP and SocGen’s results showed the strains of aggressive deleveraging in the first quarter. BNP should reach its Basel III capital target this year, 18 months ahead of its smaller rival. But it’s also more vulnerable to a possible worsening on the euro front.

Hollande opts for non-dangerous euro policy

3 May 2012

In his TV debate with Nicolas Sarkozy, the French socialist and presidential favourite presented a moderate version of what he wants to “renegotiate” in the euro fiscal compact. He wants the EU to agree on some limited reforms - most of which are already in the pipeline.

French vote opens new phase of euro zone crisis

23 Apr 2012

A majority of French voters in the first round of the presidential election rejected the European recipe of reforms and austerity. The general “non” aided the ultra-right National Front, gave the Socialist Hollande the lead - and will influence the next president’s policies.

Hollande presidency bound for rocky start

20 Apr 2012

The French socialist leader has been mostly mum on the country’s major economic problems - excessive public spending and high labour costs. He’ll need to pay more than lip service to fiscal discipline before financial markets - and Germany - start taking him seriously.

IMF’s euro gloom points to right fiscal path

18 Apr 2012

Spain, France and Italy won’t be able to meet their fiscal targets next year, according to the latest IMF forecast. This is a wake-up call for both austerity fundamentalists and insouciant spenders. Fiscal discipline remains a must. But too much, too fast could be lethal.

Int’l Power does well to get better buyout from GDF

16 Apr 2012

The power generator’s board has won a 7 pct sweetener from GDF Suez in exchange for agreeing to an $11 bln minority buyout. It’s a decent result for International Power’s 30 pct outside shareholders, given wobbly markets and GDF’s majority.

Rothschild Anglo-French union secures family grip

5 Apr 2012

The investment bank is merging its French and British subsidiaries into a single listed vehicle, Paris Orleans. But the new group’s limited partnership structure guarantees airtight family control - regardless of who takes over from current chairman David de Rothschild.

Int’l Power non-execs have some leverage over GDF

30 Mar 2012

The UK energy firm has had a 6 bln stg approach from GDF for the 30 pct that the French group doesn’t own already. Bid rumours have already effectively added a slim premium to IPR shares. But its independent directors still have some power to push for a bit more.

North Sea blowout hardly justifies Total meltdown

28 Mar 2012

An out-of-control gas well off the UK coast has wiped 8.5 pct off the French oil major’s share price in three days. After BP, investors have acute fears about runaway deep sea disasters. But the reaction so far looks excessive.

Watchdogs could change Vivendi’s EMI tune

23 Mar 2012

The French group’s Universal music arm feels so good about its chances of success that it agreed to pay the full $1.9 bln price even if trustbusters block the deal. But it’s actually a third possibility - being forced to sell pieces - that could be the costliest for Universal.

Qatar forms a taste for foreign strategic assets

15 Mar 2012

After eyeing European aerospace and defence firm EADS, Qatar has snapped up a $2.6 bln stake in French oil major Total. That is a poor diversification of the Gulf state’s hydrocarbon wealth. But it might be an effective way for Qatar to shore up influence with its gas customers.

Hugo Dixon: Hollande’s sins more those of omission

12 Mar 2012

The probable next French president’s promises to cut the pension age to 60, tax the rich at 75 pct, renegotiate Europe’s fiscal treaty and launch a war on bankers aren’t as bad as they look. The real problem is he isn’t addressing the need to change the old welfare model.