Once again, French lawmakers are acting on the conviction that they know better than market participants. Apart from promises to reduce employment regulation, all of the new measures boil down to officials directing state money and subsidies to companies and projects of their choosing. So the death rattle of the French economic model continues. What remains to be seen is how the end will come. And, whether it comes in the form of a capital strike by foreign bondholders, or of domestic labor strikes and wider social and political unrest, France’s leaders remain entirely unprepared for the inevitable.
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