Le déclin de la France: Une bonne nouvelle pour le Québec ?

[cjb]

For next rating downgrade, S&P may look at France

 

Commentary: France has lots of debt, and dysfunctional politics

 

 

LONDON (MarketWatch) — The U.S. is broke? Been there. Italy is bankrupt. Done that. Spain is teetering on the edge? Got the T-shirt. There is, however, one major industrial country that has so far managed to sail through the market turmoil without anyone seriously questioning its credit-worthiness: France.

 

And yet, if you‘re looking for the next downgrade, and the source of the next shock to the global markets, it’s France you should be looking toward. The country’s debt is exploding. It is steadily losing competitiveness against Germany, and running up huge trade deficits. Its political system is every bit as dysfunctional as America’s. And, of course, it is about to be presented with a massive bill for bailing out Italy and Spain.

 

A French downgrade may only be a matter of time. If it happens, it’s going to be a huge blow to already-fragile markets. The country has the fourth largest debt in the world, and its paper is heavily traded by global investors. There would be some nasty losses on a French downgrade.

 

True, there is not much sign of it yet.

 

Almost at the same time as it was downgrading the United States, Standard & Poor’s was reaffirming France’s status as the most rock-solid of borrowers. According to the French newspaper Liberation, an S&P spokesman stated that there were no plans to downgrade France. There were no question marks over the solvency of the nation.

 

Really? Take a closer look and you might start to wonder.

 

First, French debt is escalating rapidly. It might not be as big as that of some other countries yet, but it’s getting there fast. Last year it ran a deficit of 7% of GDP. French debt will total 90% of GDP this year and 95% in 2012, according to estimates by Capital Economics. That isn’t exactly running out of control — but it is getting very close. Indeed, it’s around the same levels of debt-to-GDP that earned the U.S. a downgrade. And France is racking up fresh debt at a faster rate than countries such as Italy or Spain. It is hard to see how you can feel comfortable about that.

 

Next, France is steadily losing competitiveness against Germany — in exactly the same way that countries such as Italy and Spain have, except not quite so quickly. France, a major manufacturing center, used to run healthy trade surpluses; now it runs big deficits. The balance of trade for the six months to June showed a deficit of 37.5 billion euros compared with a deficit of 27.6 billion euros in the last six months of 2010, figures released last week showed. The deficit with Germany, its major trading partner, is running at a billion euros a month. Back in 2004, it was regularly running surpluses of a billion euros a month. Countries with big, persistent trade deficits — as any American can testify — have to borrow to fund themselves. The bigger the debts they run up, the greater the risk of a downgrade.

 

Third, if the U.S. has a dysfunctional political system, then France is not much better. Like the U.S., it has separate elections for the president and the legislature, creating a system that is often close to paralysis. And no other country in the developed world is quite so resistant to economic reform: Any modifications to working hours or pensions or welfare plans brings out rioters and is usually swiftly abandoned.

 

 

 

And like the U.S., it has a president who came to power on a wave of optimism, and has since turned out to be fairly ineffectual. France’s President Nicolas Sarkozy is deeply unpopular. He is scoring in the mid-20s in the polls — a slight recovery from the nadir early this year, but hardly a secure position. Marine Le Pen, the far-right National Front leader, is scoring around 20%, and she advocates pulling out of the euro and restoring the franc. Indeed, of all the main euro-area countries, France is the only one where a major (if not exactly mainstream) political movement argues for breaking up the single currency.

 

Far-reaching ramifications

 

Finally, if Italy and Spain have to be rescued, then it will be France that foots a lot of the bill. Germany can afford it; France can’t. Once you add Spanish and Italian debts, the French balance sheet looks in terrible shape.

 

“With the turmoil in Europe there have been many politicians suggesting that the size of the [European Financial Stability Fund, or EFSF] has to be increased,” noted Gary Jenkins of Evolution Securities in an analysis on Monday. “But any suggestion that the EU is turning into a fiscal union (even if by default) could well have an impact on individual sovereigns’ ratings as well as the EFSF structure.” Indeed so. Every time a euro-area country has to be bailed out, it puts more pressure on the finances of the few that remain completely solvent.

 

Add it all up, and if the U.S. is getting downgraded there is no reason for the ratings agencies not to turn their fire on France next. That matters hugely for the financial system. While countries such as Greece and Portugal are largely irrelevant to the global system, France is very important. The country has a lot of paper out there — the government has total outstanding debts of $1.7 trillion, making it the fourth largest debtor in the world after the U.S., Japan and Italy. And that debt is far more widely held — 38% of French debt is held internationally, which is a lot more than Italy (24%), the U.S. (21%) or Japan (2%), according to calculations made by the research house TheCityUK.

 

The cost of insuring against a French default is starting to rise. The markets have started to notice the country’s dire position. It can’t be that long before the rating agencies catch up. If France does get downgraded, then it is going to be a very serious blow to the markets. Just about every bank and every bond portfolio in the world is going to take a hit.

 

Matthew Lynn is a financial journalist based in London. He is the author of "Bust: Greece, the Euro and the Sovereign Debt Crisis," and he writes adventure thrillers under the name Matt Lynn.

 

 

 

 

 

Il y a déjà des milliers de français qui viennent vivre au Québec chaque année, je crois que cela laisse présager que le mouvement va encore plus s'accentuer...

[Malek]

Environ 6000 à 8000 par an, une grande majorité qui reste après plusieurs années.

 

Une bonne immigration de gens très éduqués en général, mais très chialeuse

 

Ce n'est que de bonnes nouvelles pour nous.

[Feanaro]

For next rating downgrade, S&P may look at France

 

Commentary: France has lots of debt, and dysfunctional politics

 

 

LONDON (MarketWatch) — The U.S. is broke? Been there. Italy is bankrupt. Done that. Spain is teetering on the edge? Got the T-shirt. There is, however, one major industrial country that has so far managed to sail through the market turmoil without anyone seriously questioning its credit-worthiness: France.

 

And yet, if you‘re looking for the next downgrade, and the source of the next shock to the global markets, it’s France you should be looking toward. The country’s debt is exploding. It is steadily losing competitiveness against Germany, and running up huge trade deficits. Its political system is every bit as dysfunctional as America’s. And, of course, it is about to be presented with a massive bill for bailing out Italy and Spain.

 

A French downgrade may only be a matter of time. If it happens, it’s going to be a huge blow to already-fragile markets. The country has the fourth largest debt in the world, and its paper is heavily traded by global investors. There would be some nasty losses on a French downgrade.

 

True, there is not much sign of it yet.

 

Almost at the same time as it was downgrading the United States, Standard & Poor’s was reaffirming France’s status as the most rock-solid of borrowers. According to the French newspaper Liberation, an S&P spokesman stated that there were no plans to downgrade France. There were no question marks over the solvency of the nation.

 

Really? Take a closer look and you might start to wonder.

 

First, French debt is escalating rapidly. It might not be as big as that of some other countries yet, but it’s getting there fast. Last year it ran a deficit of 7% of GDP. French debt will total 90% of GDP this year and 95% in 2012, according to estimates by Capital Economics. That isn’t exactly running out of control — but it is getting very close. Indeed, it’s around the same levels of debt-to-GDP that earned the U.S. a downgrade. And France is racking up fresh debt at a faster rate than countries such as Italy or Spain. It is hard to see how you can feel comfortable about that.

 

Next, France is steadily losing competitiveness against Germany — in exactly the same way that countries such as Italy and Spain have, except not quite so quickly. France, a major manufacturing center, used to run healthy trade surpluses; now it runs big deficits. The balance of trade for the six months to June showed a deficit of 37.5 billion euros compared with a deficit of 27.6 billion euros in the last six months of 2010, figures released last week showed. The deficit with Germany, its major trading partner, is running at a billion euros a month. Back in 2004, it was regularly running surpluses of a billion euros a month. Countries with big, persistent trade deficits — as any American can testify — have to borrow to fund themselves. The bigger the debts they run up, the greater the risk of a downgrade.

 

Third, if the U.S. has a dysfunctional political system, then France is not much better. Like the U.S., it has separate elections for the president and the legislature, creating a system that is often close to paralysis. And no other country in the developed world is quite so resistant to economic reform: Any modifications to working hours or pensions or welfare plans brings out rioters and is usually swiftly abandoned.

 

 

 

And like the U.S., it has a president who came to power on a wave of optimism, and has since turned out to be fairly ineffectual. France’s President Nicolas Sarkozy is deeply unpopular. He is scoring in the mid-20s in the polls — a slight recovery from the nadir early this year, but hardly a secure position. Marine Le Pen, the far-right National Front leader, is scoring around 20%, and she advocates pulling out of the euro and restoring the franc. Indeed, of all the main euro-area countries, France is the only one where a major (if not exactly mainstream) political movement argues for breaking up the single currency.

 

Far-reaching ramifications

 

Finally, if Italy and Spain have to be rescued, then it will be France that foots a lot of the bill. Germany can afford it; France can’t. Once you add Spanish and Italian debts, the French balance sheet looks in terrible shape.

 

“With the turmoil in Europe there have been many politicians suggesting that the size of the [European Financial Stability Fund, or EFSF] has to be increased,” noted Gary Jenkins of Evolution Securities in an analysis on Monday. “But any suggestion that the EU is turning into a fiscal union (even if by default) could well have an impact on individual sovereigns’ ratings as well as the EFSF structure.” Indeed so. Every time a euro-area country has to be bailed out, it puts more pressure on the finances of the few that remain completely solvent.

 

Add it all up, and if the U.S. is getting downgraded there is no reason for the ratings agencies not to turn their fire on France next. That matters hugely for the financial system. While countries such as Greece and Portugal are largely irrelevant to the global system, France is very important. The country has a lot of paper out there — the government has total outstanding debts of $1.7 trillion, making it the fourth largest debtor in the world after the U.S., Japan and Italy. And that debt is far more widely held — 38% of French debt is held internationally, which is a lot more than Italy (24%), the U.S. (21%) or Japan (2%), according to calculations made by the research house TheCityUK.

 

The cost of insuring against a French default is starting to rise. The markets have started to notice the country’s dire position. It can’t be that long before the rating agencies catch up. If France does get downgraded, then it is going to be a very serious blow to the markets. Just about every bank and every bond portfolio in the world is going to take a hit.

 

Matthew Lynn is a financial journalist based in London. He is the author of "Bust: Greece, the Euro and the Sovereign Debt Crisis," and he writes adventure thrillers under the name Matt Lynn.

 

 

 

 

 

Il y a déjà des milliers de français qui viennent vivre au Québec chaque année, je crois que cela laisse présager que le mouvement va encore plus s'accentuer...

 

Au bout de 5 ans, 7 à 8 sur 10 sont repartis d'après le Consulat de France à Montréal... Les Français, en majorité et à la différence d'autres nationalités n'émmigrent pas au Québec pour toute leur vie. Ils viennent ici pour vivre une expérience personnelle, professionnelle ou terminer leurs études. Une fois terminée, une grande partie reparte en France liée à un "mal du pays". Aujourd'hui, s'il y a autant de Français au Québec, ce n'est pas forcément directement lié à la santé économique de la Province mais plus aux campagnes de promotion et aux dispositifs administratifs déployés par le gouvernement québécois pour les attirer.

 

Après, pour revenir à l'article, c'est sur que la France est exposée à une dégradation de sa note. Mais bon, maintenant, je pense que les agences de notation ont tellement pris de pouvoir que n'importe quel pays est exposé à cela. Ce n'est d'ailleurs pas normal que des agences comme celles-ci aient le pouvoir de décider de l'avenir d'un pays. Si demain, le système économique s'éffrondre à nouveau, cela sera en partie à cause de celles-ci.

 

Enfin, oui la France a une belle dette mais il ne faut pas oublier que celle du Québec n'est pas mal non plus...

[Davidbourque]

Effectivement, c'est très rassurant de voir que la cote d'un pays dépend d'organisme directement responsable de la fraude causant la récession de 2008 !

[cjb]

Le Québec et sa dette jouissent de la protection du Canada.

La France et sa dette ne peuvent jouir d'aucune réelle protection.

 

 

Le Québec n'est pas un état en tant que tel.

Plusieurs états américains et provinces canadiennes ont beaucoup plus de dettes que nous.

 

 

Le Québec jouit d'une stabilité politique dont ne peut prétendre la France.

 

 

L'état québécois possède des actifs très importants pour sa taille ( Hydro-Québec, participation minoritaire dans des dizaines de compagnies privées) ce que ne peut prétendre la France non plus.

 

 

Et bien plus important surtout, les banques québécoises sont très en santé contrairement aux banques françaises qui sont gorgées d'obligations grecques!!

 

LA France est le pays le plus directement exposé à une faillite de la Grèce.

[cjb]

Au bout de 5 ans, 7 à 8 sur 10 sont repartis d'après le Consulat de France à Montréal... Les Français, en majorité et à la différence d'autres nationalités n'émmigrent pas au Québec pour toute leur vie. Ils viennent ici pour vivre une expérience personnelle, professionnelle ou terminer leurs études. Une fois terminée, une grande partie reparte en France liée à un "mal du pays". Aujourd'hui, s'il y a autant de Français au Québec, ce n'est pas forcément directement lié à la santé économique de la Province mais plus aux campagnes de promotion et aux dispositifs administratifs déployés par le gouvernement québécois pour les attirer.

 

 

Salut,

 

j'ai rencontré cet été une dizaine de jeunes français d'horizons variés qui sont fraîchement arrivés à Montréal.

 

Leur point en commun? Ils en ont marre du chômage chronique de leur pays.

 

Ils ont tous été embauché à Montréal dans des emplois qu'ils ne pourraient présentement avoir dans leur pays.

 

Plusieurs repartiront un jour, mais ils viennent ici payer des impôts, consommer, payer des taxes, payer un loyer, occuper des emplois que nous n'arrivons pas à combler.

[uqam+]

----------------

Edited November 10, 2011 by uqam+

[cjb]

L'article a l'air d'être écrit par des vautours qui guettent la prochaine carcasse...

 

C'est fou le pouvoir soudain de ces agences. Je veux bien croire qu'elles peuvent jouer un rôle utile en rappelant à chaque pays qu'on ne peut pas indéfiniment s'endetter. Mais je me demande parfois si elles sont pas en conflit d'intérêt : plus elles "décotent" un pays, plus celui-ci devra payer des taux d'intérêts élevés. Il y a donc des prêteurs qui en profiteront au bout du compte. Puisque les agences de cotations sont privées, comment savoir si elles ne tirent pas elles-mêmes profit de ces décotes, au moins de manière indirecte, en tant que prêteurs ?

 

Quelqu'un s'y connaît un peu dans ce domaine relativement ésotérique ?

 

D'après-toi, est-ce que ces agences de notation profitent financièrement des évaluations-chocs qu'elles font ? Ce qui se passe aux Bermudes reste aux Bermudes !

 

Il est très facile de parier à la baisse sur la décote d'un pays.

 

Il y a un mécanisme très simple qui permet de profiter de la décote d'un pays:

 

Tu achètes un CDS ( Credit default Swap) sur la France, et la hausse du taux d'intérêt de la dette française (supposons qu'elle passe de 3,28% à 3,60%) vous procure un rendement de plusieurs dizaines de pourcent.

 

Un CDS est en quelque sorte une assurance sur le défaut d'une obligation, mais qui est revendable en tout temps. Tu n'as pas besoin d'attendre que l'obligation fasse faillite pour t'en débarrasser. Tu peux revendre ta police au plus offrant quand bon te chante.

 

De plus, trouverais-tu normal que ton voisin puisse acheter une assurance incendie sur ta maison ? Tu trouverais sans doute cela dangereux et ça l'inciterait à des actes criminels !!! Et bien cela est possible aujourd'hui dans le merveilleux monde de la finance !

 

 

Au bout du compte les agences appartiennent à des intérêts privés comme Warren Buffet. Ces gens ne sont pas des enfants de coeur et profitent de la crise actuelle.

[qwerty]

Le Québec et sa dette jouissent de la protection du Canada.

La France et sa dette ne peuvent jouir d'aucune réelle protection.

 

 

Le Québec n'est pas un état en tant que tel.

Plusieurs états américains et provinces canadiennes ont beaucoup plus de dettes que nous.

 

 

Le Québec jouit d'une stabilité politique dont ne peut prétendre la France.

 

 

L'état québécois possède des actifs très importants pour sa taille ( Hydro-Québec, participation minoritaire dans des dizaines de compagnies privées) ce que ne peut prétendre la France non plus.

 

 

Et bien plus important surtout, les banques québécoises sont très en santé contrairement aux banques françaises qui sont gorgées d'obligations grecques!!

 

LA France est le pays le plus directement exposé à une faillite de la Grèce.

 

 

J'ajouterais a ton commentaire que la dette du Quebec inclue des elements tres particuliers.

Quand on parle de + $200B de dette: 94% du GDP, on inclut:

- Le passif des pensions quebecoises: $30B - due a l'engagement du Governement a payer les pensions

- La dette de Hydro Quebec, etc....: $37B - mais la valeur des actifs est exclue...

- etc.

 

La dette du Quebec etait de ~$65B en 1996.... avant le changement de la methode de calcul...

Le calcul de dette est donc tres severe et les autres provinces canadiennes ne compte pas leur dette de la meme facon.

[cjb]

Et rajoutons que le déficit québécois est d'environ 0,2 % du PIB, contrairement à 7-8% en France.

 

Différence majeure. Les déficits québécois sont un héritage d'une autre époque et sont maintenant largement contrôlés.