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I gather that ADVFN has a large presence in France and a growing readership in a country I adore. So before I offend all you froggies out there may I wish you a very happy Bastille Day. Now for the offending. There is always stiff competition for the title of the worst and maddest leader in the EU. Like Eurovision, the Greeks traditionally make a strong showing as do those chaps from the former Yugoslav Republics. However, before your recent Presidential poll, I sensed that Francois Hollande would be a very strong contender indeed for this title and since his election he has not disappointed me. As each week has gone by he has shown himself to be even madder and stupider than anyone could have dreamed of. His reaction to news that Peugeot is to fire 8,000 employees was a master-class in self delusion.
Here are the facts. Peugeot is loss making. If it carries on as it has been then it will go bust. Its problem is that its cars are not very good and as such they are over-priced for what they offer. But Peugeot cannot afford to cut its prices because its cost base is too high. And its cost base is too high because it builds cars in France where it must pay high wages to staff who put in s short working week, demand long holidays, have a propensity to go on strike and overall do not have a great work ethic.
Fact two is that France itself is, while not quite in the Spanish League, heading towards bankruptcy. The country has not had a balanced budget since 1974. In 2011 the deficit was equivalent to 5.6% of GDP. State spending was 56% of GDP. Public debt at the end of 2011 was 85.8% of GDP – remember that 80% is meant to be the point of no return. My guess is that when that number hits 100% (2014?) everyone will realise that the game is up but the markets are already starting to realise that we are pretty much there.
And so back to Peugeot. It has no choice if it is to survive. Its decision is based on real world economics. The French Unions responded as you might expect with the threat of strikes and widespread disruption which will, of course, only make things worse. But it is Hollande who really wins prizes for being just plain stupid. He has already made France’s finances worse with talk of 75% tax rates for high earners which will simply drive rich froggies abroad so reducing the fiscal take. His response to Peugeot was to say: “The plan in the current state is not acceptable, it won’t be accepted.” Hollande wants to bring in Government “experts” to find another solution.
Yeah right…like Government experts can really add value in the private sector. It is like bringing in hookers to advise the Church on morality. These experts are unqualified and bound to make the wrong call. If they were any good they would already be in the private sector not shuffling paper clips in the Civil service. Hollande has offered up another cunning plan. Peugeot sacks no-one and he will offer financial incentives to Froggies to buy French made cars. Genius. Okay I think it breaks the Treaty of Rome in what we used to know as the Common Market in that Government’s cannot subsidize national interests like that but let’s ignore that minor point.
There are two sorts of deluded left wing leaders. The more harmless variety (Obama) thinks he can create jobs by using Government largesse (i.e. taxpayer’s cash) to “back winners. Inevitably these winners turn out, like Solara, to be abject losers and the taxpayer cash goes straight to money heaven. The more dangerous sort (Hollande) tries to save jobs by backing losers. This always fails. The losers do not adapt and become ever less competitive and when the taxpayer’s money runs out the whole edifice collapses.
France cannot afford to subsidize anything if she is to avoid going the way of Spain or Greece within two years. Peugeot cannot afford not to cut costs. Let the car maker fie away to survive and let Hollande concentrate on spending less not more. He won’t. On his watch France is a sell. As I said, Happy Bastille Day.
“It is like bringing in hookers to advise the Church on morality.”
Or like bringing in ‘fund manager of the year’ TW to advise on matters financial.
I agree, Hollande is a waste of space, one of those accidental politicians who fell into office because someone else lost an election. But however shite he is, he can’t possibly be as stupid, venal and all-round crap as David ‘Embarrassment’ Cameron who couldn’t even win an election against Gordon ‘Gold’ Broon.
Winnie the Merde
How good to hear from you again. And indeed thank you for pointing out that I was indeed the top rated Alpha Fund Manager of 2010. In the interests of balance you should have mentioned that I had a shocking 2011 and as we know there will be no 2012 decider.
It is so kind of you to point out that I was indeed once “fund manager of the year” – I may hire you as my PR gimp yet…
Hollande or Call Me Dave: who is worse? I agree that both are useless. Hollande has only had a month to show how useless and to be fair CMD had shown his true colours within a month by reneging on the EU referendum, etc.
I sense that our (shared) anger with Dave is that he told us he was a conservative and thus his muddle headed thinking on everything but especially his fiscal laxness is all the more disappointing. Hollande always admitted he was a loony tune socialist. And he is delivering on that promise in spades.
As ever, thank you for your feedback, it is much appreciated.
Tom Winnifrith
Winnie the Merde, how about playing the ball rather than the man?
You’re beginining to sound like a bitter loser who can’t accept any responsibility for his own choices and actions.
CH Ingoldby,
Thanks for this. I tend to agree about the idea that we are al ultimately responsible fo our own actions.
Mr W Le Merde is a fragile sort who is clearly in need of our sympathy and thoughts as he struggles with his own inadequacies seeking escape by making a fool of himself with anonymous BB comments. I just hope that he finds the right mix of medication and therapty to get through it all.
Yoir feedback is appreciated
Tom Winnifrith