Debt & Deficit Outlooks for France, Italy, Spain, & Portugal

Is “ugly” the right word?

By Caroline Gray, Senior Economics Editor, Focus Economics:

After dragging Greece kicking and screaming through a never-ending vicious cycle of fiscal adjustment and output decline, the European Commission seems to be softening in its attitude towards other struggling Eurozone economies.

France, Italy, Portugal and Spain, among others, have all repeatedly been given extensions to reduce their debt and deficit levels after recurrent breaches of EU targets have gone unpunished, and the trend looks set to continue as our forecasts show that those economies will underperform again this year and next.

Does this mark a shift in mindset within the Commission as to whether the Growth and Stability Pact is fit for purpose? Or rather just tactical maneuvering—or indeed resigned acceptance—in tough political times, as the EU faces unprecedented challenges to its legitimacy and survival?

Under the EU’s Growth and Stability Pact, all Eurozone countries are required to bring their deficits below 3% of GDP and to work towards reducing debt down to 60% of GDP, and any country failing to do so is subject to strict deficit reduction targets under the corrective arm of the Excessive Deficit Procedure. Certainly, widespread acknowledgement of the self-defeating Catch-22 whereby austerity lowers growth and thereby weighs further on public finances has encouraged the EU authorities to allow leniency in a number of instances, but this is only part of the explanation.

The political and social crises that years of fiscal adjustment have unleashed across Europe have contributed to a wave of anti-EU populism and unprecedented electoral gains for far-right parties in some countries, and the emergence of anti-austerity far-left parties in others. The EU is therefore not in a position to rock the boat any further, as the potential political costs of taking an inflexible stance on debt and deficit reduction measures are now too high in many cases.

In what follows, we examine the outlook for France, Italy, Portugal and Spain, and the political and economic obstacles that are set to see them breach their debt and deficit reduction targets again in 2016 and/or 2017.

FocusEconomics Eurozone Public Debt Fiscal Deficit

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Debt levels: France’s public debt has reached almost 97% of GDP—the seventh highest in the Eurozone.

Deficit targets: Last year, the European Commission gave France an extra two years again, this time until 2017, to bring its deficit below 3% of GDP. To achieve this, the French government targets a deficit of 3.3% of GDP in 2016 and 2.7% in 2017.

Our Consensus Forecast: France’s budget deficit will come in at 3.4% of GDP in 2016 and 3.1% of GDP in 2017, according to average estimates we produced after polling 34 leading macroeconomic analysts on the French economy. This means that France will not only overshoot by far its government’s own targets, but it will also fail to meet the EU’s requirement by 2017. French public debt is seen increasing slightly from an estimated 96.7% of GDP at the end of 2016 to 97.1% of GDP by the end of 2017.

France’s problem: The French economy has long suffered from a lack of competitiveness and is stuck on a weak growth trajectory, which prevents it from meaningfully reducing its debt and deficit levels. Like its Eurozone neighbors to the South, it is also completely failing to reduce its structural deficit—the part of the overall deficit which is adjusted to exclude the impact of temporary measures and cyclical variations.

The economy recovered in Q3 this year from an unexpected contraction in Q2, but growth still disappointed and forced the government to finally admit that its 1.5% growth target for this year looked overly ambitious, long after our analysts had downgraded their outlook. Our Consensus Forecast sees French GDP growing a mere 1.3% in 2016 and 1.2% in 2017—forecasts which have been gradually revised downwards throughout this year from 1.5% and 1.6% respectively back in January.

Beleaguered Socialist President François Hollande has come under attack this year by France’s independent fiscal watchdog, which foresees a high risk that spending will be more than planned—especially ahead of the 2017 presidential elections—and revenues less than expected this year and next. This, in turn, puts France at risk of ever greater fiscal incompliance.

Hollande, whose approval rating in France has fallen as low as 4% at times this year, has seriously struggled to make progress with structural reforms. Those that he has pushed through—such as the labor reform approved in July—have invariably ended up being rather a damp squib after intense political and social opposition forced him to water down initial proposals.

With the French left in the doldrums, right-wing sentiment has surged, though arguably more on account of the anti-Islam rhetoric of the French right in the wake of terrorist attacks than support for a right-wing economic reform agenda. Opinion polls suggest far-right populist Front National leader Le Pen is set to face the conservative candidate François Fillon in the second-round run-off of the presidential elections next May, following Fillon’s emergence as surprise winner of the Republican party nominations.

Fillon is currently expected to win, and is much more likely than the Socialist Party to be able to attract voters away from Le Pen with his anti-immigrant and socially conservative rhetoric. Happy to be branded a “Thatcherite”, he is promising radical structural reform in France and has announced his commitment to take on the infamous French trade unions, though whether this would prove viable in practice is entirely another question—thwarted reform attempts during his previous life as prime minister when Nicolas Sarkozy was president might suggest otherwise. Moreover, his detractors point out that his headline plans to reduce France’s debt and deficit by slashing government spending and axing public sector jobs are not accompanied by any concrete supply-side proposals to boost French competitiveness and innovation and create jobs.


Debt levels: Italy has the second highest level of public debt in the Eurozone after Greece, at approximately 132% of GDP—broadly the same level that Greece had at the outset of the crisis in 2009.

Deficit targets: In May this year, the European Commission granted Italy particularly generous leeway over its 2016 budget but warned in return that it must tighten its fiscal policy next year. It set a 2017 budget deficit target for Italy of 1.7%, arguing that this this target—which is lower than the goal for several other Eurozone countries—is necessary in order to reduce the country’s huge debt pile.

Our Consensus Forecast: After polling 33 leading economists on Italy this month, we see the country’s budget deficit declining only slightly to 2.4% of GDP in 2017, after an estimated 2.5% in 2016. This means that Italy will overshoot by far the 2017 target set by the Commission. Italian public debt is forecast to remain broadly stable at 132.7% of GDP in 2016 and 132.6% in 2017.

Italy’s problem: Italy is failing to reduce its heavy debt burden and the structural part of its overall deficit has been rising since 2014, rather than falling by the 0.5% of GDP each year that the EU authorities ostensibly require until a country balances its books in structural terms. Italy has attributed its poor deficit performance this year to extraordinary spending on migration and post-earthquake reconstruction, though other ongoing structural features such as a weak banking sector and poorer-than-expected growth have also contributed, with our Consensus Forecast putting GDP growth at only 0.8% both this year and next. Ultra-low inflation has also hindered Italy’s debt reduction efforts.

The European Commission could potentially reject Italy’s 2017 budget proposal, under which the country is set to infringe its debt and deficit targets by a long way next year, but no decision is expected before the constitutional referendum called by Prime Minister Matteo Renzi on 4 December.

The proposed constitutional reform would reduce the power of the Senate (upper house) in order to make parliamentary decision-making more efficient, but Renzi has also repeatedly made his political future conditional on a win for the “Yes” vote, stating that he will resign if he is defeated—a strong possibility. A number of analysts are skeptical as to whether Renzi would actually resign, but if he does, any new prime minister, though likely to be supported by a similar parliamentary majority, would be focused mainly on carrying the country over to the next elections due to be held by May 2018. This risks further delays in implementing structural reforms, which have already been paralyzed for months since Renzi has sought to avoid negative consequences for the referendum vote.

Both Renzi’s future and Italy’s debt sustainability are also on the line due to the risk of an imminent collapse of the country’s third-largest bank, Monte dei Paschi di Siena. As we anticipated, investors are reluctant to throw more money into an institution that has already been bailed out several times previously to no avail, and the bank is rapidly running out of time to meet a year-end deadline to raise an extra EUR 5 billion of capital—five times its current market value—and offload scores of NPLs.


Debt levels: Portugal has the third highest level of public debt in the Eurozone after Greece and Italy (in that order), at not far off 130% of GDP—broadly the same level that Greece had at the outset of the crisis in 2009.

Deficit targets: In August this year, the European Commission decided to waive a budgetary fine on Portugal for missing its deficit target last year, at the same time as it did so for Spain, and in Portugal’s case it gave it an extra year, until 2016, to bring its deficit down to 2.5%. Last year, Portugal had missed its 2.5% deficit target by far, coming in at 4.4% instead, mainly since it had to rescue its failed lender Banif.

Our Consensus Forecast: Portugal is expected to miss its 2.5% deficit target again this year with a projected deficit of 2.7% of GDP, according to the average forecast of a panel of 19 local and international macroeconomists that we surveyed on the Portuguese economy this month. Next year, in 2017, our analysts see Portugal’s deficit finally reducing to 2.4%. Portuguese public debt is seen decreasing slightly from an estimated 128.1% at the end of 2016 to 126.5% at the end of 2017.

Portugal’s problem: Portugal’s slow economic growth is hindering its debt and deficit reduction efforts. The Portuguese government is basing its deficit reduction projections on the assumption that the Portuguese economy will grow 1.2% in 2016 and 1.5% in 2017, but these forecasts are far more optimistic than our Consensus Forecast for growth of 1.0% in 2016 and 1.2% in 2017. Weaker-than-expected growth therefore looks set to prevent Portugal from meeting its deficit target this year, and any further downgrades to the Consensus Forecast for near-term GDP growth going forward could even put Portugal’s ability to achieve the 2.5% deficit in 2017 in jeopardy too.

Portugal was praised by the European Commission for its austerity efforts under its three-year bailout program in 2011-2014, during which time the country was led by a center-right government, but the political landscape has since changed. A new Socialist government took office in late 2015 which only has a minority of seats in parliament and is therefore dependent on the support of three far left parties. Socialist Prime Minister António Costa may have somewhat softened his attack on his predecessor’s austerity measures since taking office, but the need to agree policies with radical left parties complicates any reform agenda.


Debt levels: Spain’s public debt remains stubbornly high at around 100% of GDP—the fifth highest level in the Eurozone.

Deficit targets: After deciding in August to waive a budgetary fine on Spain for missing its deficit target in 2015, the European Commission set a new series of targets from 2016 to 2018 in order to finally bring Spain’s overall deficit below the long-targeted 3% of GDP that year. In 2016 it now expects Spain to meet an overall deficit target of 4.6% of GDP, followed by 3.1% in 2017 and 2.2% in 2018.

Our Consensus Forecast: On average, the 33 macroeconomic analysts that we surveyed on the Spanish economy this month expect the country to meet its revised deficit target reasonably comfortably this year, with the Consensus for a deficit of 4.3% of GDP. In 2017, however, our panel sees Spain breaching its targets again, with an average deficit forecast of 3.4%. In both years, Spain is forecast to have the largest deficit of all Eurozone countries, while Spanish public debt is seen at 100.2% of GDP in 2016 and 99.9% in 2017.

Spain’s problem: The resilience of Spain’s GDP growth in recent quarters—the country is growing at one of the fastest rates among EU countries—is key to its deficit reduction efforts. However, the country’s persistent structural deficit (the part of the overall deficit which is adjusted for temporary measures and cyclical variations) still renders its economy particularly vulnerable to future changes in economic climate and puts the country on a collision path with Brussels over the required fiscal consolidation trajectory.

Both Spain’s Independent Authority for Fiscal Responsibility (Airef) and the European Commission have warned that Spain is relying too heavily on GDP growth to reduce its deficit while neglecting much-needed progress with structural reforms to reduce its sizable structural deficit. Achieving this will depend on whether the new minority conservative government led by returning conservative Prime Minister Mariano Rajoy is able to secure sufficient support from other parties in parliament to push through a reform agenda. The weak government was finally formed in November after two inconclusive elections and ten months of a caretaker government, but it faces an exceedingly tough challenge ahead to successfully build alliances to govern effectively. By Caroline Gray, Focus Economics.

Big Trouble in Emerging Markets is doing a number on Spanish banks. Read…  Hit by Global Turmoil, Banks in Spain Get Jittery (Again)

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  34 comments for “Debt & Deficit Outlooks for France, Italy, Spain, & Portugal

  1. Tom Kauser says:

    Qe4 * or its the blond dudes fault!

  2. Tom Kauser says:

    Oops! QE*4 or bust!

  3. Tom Kauser says:

    The first housing crash hit Denver especially hard since at the time it was hardly regulated as a real estate market compared to other major cities.
    The new numbers show that the flyover parts are starting to out perform the coasts in appreciation percentages.
    Denver is still the wild west of real estate regulations.
    The excesses are starting to curdle?

  4. B Fast says:

    I would love to see the American debt and deficit values presented beside the European ones. I have been watching as the debt creeps ever closer to the 20 trillion mark. Surely it will get noticed when it hits this milestone, probably yet this year.

    • Wolf Richter says:

      US gross national debt exceeded 100% of GDP a while ago – worse than most countries in the Eurozone. But we can print our own money.


      • economicminor says:

        Well, we really don’t print money, just create debt. Which so far we have been able to export our inflation with trade deficits or hide it inside dysfunctional companies. Or hide it inside of balloons like real estate and vehicles.

        So far, so good~~~~~

        • economicminor says:

          Happy Days are Here Again!

          Forget your troubles (Happy days)
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          You better chase all your cares away
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          Get ready for the judgment day (Happy days are here again)

          The sun is shining
          Come on get happy (Shout it now)
          The Lord is waiting to take your hand
          (There’s no one who can doubt it now)
          Shout hallelujah (So let’s tell the world)
          And just get happy (about it now)
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          Soon your cares will all be gone
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          Forget your troubles (Happy days)
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          You better chase all your blues away
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          And just get happy (of cheer again)


          Read more: Glee – Happy Days Are Here Again Lyrics | MetroLyrics


        • Newbie22 says:

          But I thought the fed wants inflation?

      • B Fast says:

        Wolfe, you really don’t buy the “we can print our problems away” theory do you? Our printing rights may delay things a little, but the house of cards will come down.

        • Wolf Richter says:

          I guess you haven’t read my stuff long enough :-)

          However, the US cannot go bankrupt because it controls its own currency, unlike Greece. The US (via the Fed) can always “print” enough money to buy up whatever Treasuries the government issues, just like Japan, the worst fiscal wreck in the developed world. Japan will NEVER have a sovereign debt crisis the way Greece has one though it’s in much worse shape fiscally speaking. It will have other crises. It might have a yen crisis. It might fall into devastating inflation. But it will NEVER have a sovereign debt crisis. Same for the US.

      • Dan Romig says:

        The CBO has stated that it projects that our national debt will exceed GDP for a decade at least. On 23 August 2016, the CBO published this little gem:

        “In contrast, the cumulative deficit through 2026 is smaller in CBO’s current baseline projections than the shortfall projected in March, chiefly because the agency now projects lower interest rates and thus lower outlays for interest payment on federal debt. Nevertheless, by 2026, the deficit is projected to be considerably larger relative to GDP than its average over the past 50 years.”

        When the CBO published this, the 2 Year Treasury Yield Curve was 0.76%. Yesterday it closed at almost 3 times that at 2.11%.

        • Dan Romig says:

          Correction: The 2 Year Treasury Yield Curve closed Wednesday 30 November at 1.11% – not 2.11%. Sorry, my bad…

    • nhz says:

      The public debt says very little when presented out of context.

      The Netherlands has a relatively low public debt within Europe but one of the highest private debt loads in the world, way above the US. If you look at total debt (public + private) the Netherlands is in the top 3 worldwide but has the highest credit ratings from the ratings agencies, go figure … Netherlands isn’t more clever that other countries, it just is better in cooking the numbers, arranging a ponzi and making things look better on paper than they really are.

      The argument that the high private debt doesn’t matter is usually: ‘Dutch people have been very faithful in paying the mortgage (not paying off, that’s not-done over here), so they deserve the highest credit rating’. Of course people pay the mortgage in Netherlands: payments are very low due to all the subsidies and it is way cheaper than paying rent. And home prices have been going up for 30 years or so so owners are ‘building equity’ with leverage every year, which affords living far above their means. By US definitions, much of the Dutch housing market could be considered sub-prime but just like with the US sub-prime crisis, nobody cares about that as long as the party keeps going.

      Also, there is an unofficial government put option below much of the Dutch housing market (the government guarantees a borrower will never lose money when they have to sell the home; this applies to over 90% of recent home purchases). Although there has been some discussion with EU financial authorities about this, I think the potential cost of this government put (several hundred billion euro) should be counted in the public debt, which would immediately raise it to FAR above the EU target.

      And it’s not just Netherlands, Denmark is in a bit similar situation due to idiotic housing market incentives in the past. Most EU countries probably have their own tricks for cooking the numbers.

  5. Mutthead says:

    Actual difference between Greece and the rest: Greece is an historical ally of Russia due to religion (like Serbian, the others historical religious rivals. Hence different treatment by “West”(ern Roman Empireĺ. As in ME, religious loyalties still determine policy, aber de esso no se habla

    • Stavros H says:

      That is correct. Their treatment of Greece has been far harsher than any other country in the EU. One of the reasons is the one you are noting, a second one (and related) is that Greece is a traditional enemy of Turkey. The NATO strategy in recent years has been to weaken all of its neighbors so that Turkey can maintain its NATO-designated role as the launchpad for proxy wars against both Syria & Iraq. Weakening Greece was a prime component of this overall strategy. The third reason, was because the EU wanted to make an example out of Greece, so that non-System political forces would be discouraged in the entire EU.

      • d says:

        How about the main reasons.

        1 Greece lied to get Into the Euro.

        Then did not make good on the back room promise it made to the few who knew it was lying, to make good on the situation.

        2 Greece was given the option public and privately, leave the euro, and get capital sum debt relief.

        GREECE REFUSED THE OFFER. Buy putting the question to the people. Knowing they would chose to stay in the Euro so athens could not debase their currency again.

        3 the rest of club med’s banks are still extremely unstable as they did not have enough capital to absorb the greek looses some of tehm will eventually fail, due directly to those fraud based, greek losses.

        4 Greece turned an American financial correction, into a global financial crisis, that is still not over and greece still will not admit it.

        Greece was just lucky Mafiosi draggi was incharge of the ECB and not somebody with a back bone, or it would no longer be in the Eur.

        • John Doyle says:

          Greece did lie to get into the EU. But they didn’t initiate it. They copied Italy and Goldman Sachs did the job for both countries. It just shows how stupid the rules were and are. Joining the EU is a great idea, but it was rendered toxic by neo-liberal constructs, so in reality cheating was legitimate.

        • d says:

          You are still deflecting.

          They lied to get what they wanted.

          The results of their lies caused ever-body, great harm.

          The results of their lies, are still causing almost ever-body, great harm.

          Much more great harm, to many, is still to occur, due to their lies.

          They wont admit thee basic facts, without blaming eve-body, but themselves, and neither will you.

          The fact that a very few, foolishly allowed them to lie, as they sought to advance the Brussels Eu Dictatorship Superstate.

          Absolves them of NOTHING.

          Blaming Goldman’s is pathetic.

          Goldman’s subcontractors, unauthorized by Goldman’s, gave the client (Greece), what it ordered.

          What the client does, with it, is not Goldman’s problem.

          This has never gone to Court, and it never will.

          As the Eu dosent want to public hang out to dry. Some greek public officials, who knowingly illegally did something, a very few unauthorized Eu officials, knowingly took advantage of.

          8 Years on, “These “Club-Med” banking problems problems aren’t caused by Greece”.


          Follow the dominoes back, and every time, when you replace the first ones that have been hidden. You end up with the greek fraud’s. Causing the greatest depression/recession the world has ever know.

          Which STILL ISN’T OVER.

          The reverberations of those greek fraud’s are still also not over, as the Mafiosi at the ECB has kept on kicking the Club-Med banking NPL mountain can. Which the losses induced by the greek fraudsters, caused to become untenable.

          Those NPL’S are holding up Zombie company’s. Those Zombie company’s, are restricting growth in, and in many cases killing. Healthy Companies.

          Its a self perpetuating downward spiral. That can only be resolved by killing the zombies. Which means the Bank’s have eat the NPL’S, and some Club-Med Bank’s, have to be allowed to fail.

          But not on the Mafiosis watch at the ECB. Whilst he can use German money to prevent it. Which he is still doing.

          All caused by, greece.

        • John Doyle says:

          Yes and no. It sounds like you are blaming Greece back to the Colonels’ takeover in about 67. Their wish to be popular led to a lot of the lax rules about the economy that carried on , but to blame Greece for copying Italy and being the major source of EU evil is just plain nonsense. It’s only 2% of the EU economy.

        • d says:

          Yes Its only 2% of the economy.

          It Borrowed How much???

          Roughly, .5 TRILLION Euro,s.

          Of that .25 TRILLION Euro’s was written off in the first restructure.

          The Club-Med banks were already heavily UNDER capitalized.

          They simply could not absorb those losses and the can has been kicked ever since.

          When you kick the can on debt it grows and grows.

          SO now the Club-med banks are in a bigger mess than they were in 08-11. Some of them however have slightly better capital ratio’s

          Blaming it not the correct term.

          Simply admitting the reality of what caused, and is still causing the Issues. Makes then simpler to deal with

          Nothing will ever be done about the greek fraud’s or the Club-Med banking fraud’s. That’s wrong but its how greece and the Eu want to deal with it, which they will pay for. Many times over. Part of the ongoing Price on that may be extracted in italy on Sunday

          Something’s may be done, to prevent such in the future.

          MDp is being declared TBTF so it can have a state (Tax Payer ) bail out. ASs it is politically expedient.

          That is MORE pathetic Euro trash can kicking.

          1 MDp is in major trouble due primarily to the greek fraud’s

          2 MDp has it’s own issues of Mafia fraud and Stok /Bond misselling.

          3 MDp Has untenable NPLS.

          So put it into Protection and Supervision.

          Before it n gets to bail in situation and don’t do another Eu taxpayer funded bank bail out as it is can kicking. Move to the next level from the Cyprus model not back to the old taxpayer funded model as its italy and italy needs more help. (Has more clout than Cyprus at the EU table)

          Make all depositors whole, Peruse and recover, or write of the Npl’s. then pay out to bond and share holders anything remaining, which there wont be.

          Do this Before it get’s to the bail in situation.

          Problem being at the moment Europe dosent have a mandatory independent Banking/Company Supervisor System, with the power to Statutorily take over and entity, protect it from all creditors. Then do what is in the best interests of the, Depositors or in the case of an entity Stock Holders and Creditors, without the use of taxpayer funds.

          It should have, so it has option’s other than the Bail in which is a final resort option.

          I can write a book on how such an entity should work.

          Here and now is not the place for it. When most cant even admit the majority of the current Club-Med banking issues Issue were caused by the fallout from the greek frauds to enter the Euro.

          You cant deal with a problem until you admit/Identify, what truly causes it.

    • MC says:

      I think many have overblown the “Russian Connection”.

      There are just two reasons Greece has been given the treatment we’ve witnessed.

      The first, to use a military paraphrase, is that Greece is politically and economically armed with an old bolt action rifle while both France and Italy have a large nuclear arsenal. Like it always happen when nuclear weapons are involved, you can probably destroy your enemy, but expect your country to be turned into an inhabitable radioactive wasteland.
      The second is that, yes, the Greeks are as guilty as a puppy sitting next to a pile of poop, but so are the mandarins and politicians in Berlin, Brussels and Frankfurt who kept on giving Athens big thumbs up while knowing the Greeks were only meeting Maastricht and Schengen obligations by cooking the books on an industrial scale.

      While it’s right that Greece pays for cooking the books and living beyond her means, her accomplices and enablers should be punished as well, not allowed to dish out punishment and to go into gold-plated retirement.

  6. unit472 says:

    France may have a ‘nuclear winter’. As of Nov. 1st 20 of France’s 58 nuclear power plants were shut down and the problem of defective steel and forged inspections seems to be growing. As 75% of France’s electric power comes from its nuclear power plants this is serious.

    Britain too is on a knife’s edge as far as its electric generating capacity is concerned.

    A severe winter in Western Europe could put paid to any idea of an economic rebound.

    • nhz says:

      Nuclear infrastructure is also crumbling in other countries like Belgium (countless technical problems) and Netherlands (one remaining nuclear reactor which is operating with huge losses). Who knows, with a really severe winter the EC politburo might need to get a bit more friendly towards Russia again. But I guess they would rather have the EU freeze to death than betray their US masters.

      BTW, only in France and maybe Belgium the nuclear infrastructure is ‘vital’, in most other EU countries it is just a small part of total electricity generation and an infinitesimal part of total energy production. Several EU countries have many idle new coal or gas fired power plants that were built with free money and are now idling because the projected energy consumption never materialized.

  7. walter map says:

    That’s a lot of debt peonage, but really, not nearly enough.

    Eventually the FIC will confiscate most of the productive capacity of the world. That won’t be enough either. It never is.

    All in good time.

  8. d says:

    Caroline Gray,

    If you want to work with “Ugly”

    “Extremely Fugly”

    Would have to be a bare minimum, considering the subject matter..

  9. Some Guy says:

    “Fillon is currently expected to win, and is much more likely than the Socialist Party to be able to attract voters away from Le Pen with his anti-immigrant and socially conservative rhetoric. Happy to be branded a “Thatcherite”, he is promising radical structural reform in France and has announced his commitment to take on the infamous French trade unions”

    I’m not sure this makes sense. Fillon will never beat Le Pen when it comes to credibility on anti-immigrant views so he’s unlikely to make up ground there, and if left wing voters have a choice between two social conservatives, why would they vote for the one promising a longer work week, austerity and attacks on unions?

    How big is the Thatcherite constituency in France? Surely not a majority, so “Project Fear” will have to do a lot of the heavy lifting, and Project Fear isn’t having a very good year so far.

    • MC says:

      As I am partly French I have problems explaining this to outsiders so bear with me here before starting throwing pencils at me. ;-)

      While the US and the UK have long been associated with a two-party political system, France has had a two-party society since the Bourbons were restored to power fater the fall of Napoleon.
      In the days of yore it could be said this split was between Royalists (Crypto-Royalists after Louis-Philippe was forced to abdicate), Conservative Catholics and Anglophobes on one side and Republicans, Anti-Clericals and Liberals (in European sense) on the other.
      The composition of these two coalitions has varied over the course of the decades, of course, but was pretty much formalized in the two-party system of the (present) Fifth Republic.

      Given how deeply ingrained is this division in French socio-political culture, how Marine Le Pen managed to turn the FN into a formidable power and a king-maker is nothing short of astonishing, especially given she has been garnering support from both sides of the political spectrum.

      This has been made possible by the Socialists’ ideological bankruptcy (most of their “intellectuals” are Soixant-huitards who, like the Bourbons before them, forgot nothing and learned nothing) and inability to deal with a globalized economy and by the Republicaines’ turn to the left in domestic politics and generally being out of touch. Nicholas Sarkozy expressed surprise at his own party’s reaction to his proposal to create yet another tax to start yet another Marshall Plan for Africa and again that his past positive comments about globalization are widely reprinted on websites from all sides of the political spectrum to ridicule him as a “blind tool of the global financial elites” or as a “useful idiot for multinationals”.

      Mr Fillon strikes me as yet another Sarkozy, meaning a completely out of touch Republicaine who can count of very friendly media to help him get elected. Anything to keep Marine Le Pen from winning.

      • nhz says:

        I doubt the two-party system is the main factor behind this, as exactly the same is happening in Netherlands with the Freedom Party of Mr. Wilders, although we have had a many-party system for ages. The existing parties are crumbling because they don’t have the answers to the current turmoil. I doubt most of the populist politicians have the answer either, but at least they are pointing out the problems instead of covering things up.

        Our ‘socialists’ (Labour party, Greens) are very similar to the Democrats in the US or the Socialist Party in France. In fact, you will find exactly the same ethnic group of people at the top of these parties in most of the West, strongly aligned with the media and the finance industry. They are living in their own world and only catering to an ‘intellectual elite’ in the bigger cities that support globalization, the EU, wars all over the world for ‘good purpose’, the surge in migrants and extremely ‘liberal’ ideas on the personal level. Slowly but surely their voters are discovering what they really have been voting for.

        On the right I think there is mostly a desire to go back to old times and old power structures, but clearly this isn’t going to work in the current conditions either. None of the existing parties has an answer so many voters will try the alternative and hope for the best – pretty similar to how Trump came to power in the US.

      • Wolf Richter says:

        >>>> “Mr Fillon … can count of very friendly media…”

        I’m certainly seeing that – astonishing actually to what extent. Maybe it’s because Hollande is so soundly despised, and Marine still somewhat untouchable, and the media is looking for someone to be in love with?

        • nhz says:

          Mr. Hollande will not be running for president again. It was officially announced today, the big media were probably informed beforehand so they could adjust their positioning to another establishment favorite.

        • d says:

          “and the media is looking for someone to be in love with?”

          Exactly who is the new kid in town, who will sell our advertising for us.

          Is all the vast majority of the Media, are interested in.

          Genuine Journalism went out the window, when Photographic Images came into play.

      • Jan Rogozinski says:

        As an historian of French history, I am constantly struck by how little has changed since the 4th century. Institutions are simply given new names.

        A historian named Ferdinand Braudel popularized the idea that different social and economic systems evolve over centuries. others change more rapidly. Take marriage; the familly was the most importantt institution for millnea. Now most men never marry.

        So change is not absolutely impossible and may even be coming. Marine Le Pen may well have been intelligent enough or instinctually clever enough to have ascertained the change.
        Unlike the other pols, who are stuck in their adolescene.

        I just wish you all would stop calling her far-right. She’s really not right at all. (How about radical centrist?) Saying she is is as stupid as Americans saying Republicans are the Red party. Everytime I hear that, I think of Stalin’s Blue Army defeating the Germans.

  10. jerry says:

    The large media organisations have shot themselves in the foot. So repulsed by their peddling of nonsense I no longer watch the BBC, ITV & Sky news. Their behaviour over BREXIT disgusted me so much I most probably will not watch and another news programme from any of them.

    For a long time now I have sourced my news from alternative sources. On TV I will watch Russia Today or Al Jezeera. I like Russia today because they do some very good work investigating how corrupt the EU is and puts the other side of the story across. This must be really irritating the UK government because they tried to shut it down by cancelling RT’s bank accounts at NATwest. NATwest had to be rescued with a government bailout which the taxpayer is still a major share holder. Also the EU declared the RT a propaganda TV network. RT did a very good documentary about the EU handling of the Greek issue where the Troika stole a bank from Greece. Here in the UK the BBC will not broadcast a single negative story about any EU country. Anybody would be given the impression that the EU is a very desirable place to live and invest. The other week when most other headline news round the world was about Italian Banks, bond rout and rapeugees, the BBC leading story was…. You can not buy Marmite from Tescos. What does the BBC think we are, gerbils.

    What amazes me is how many other people have turned away from traditional media. I can not wait until advertising purchasers wake up to the fact that their demographic have moved on.

    • d says:

      You haven’t just moved from Trad media, you appear to have moved to the dark side.

      Thats a very bad place.

      Our family knew stain, and knows what went into setting up what has morphed into ,what-you are using, and term a “Truth-full alternative”.

      I agree with your complaints about Beeb etc. however 1 or 2 steps back from where you are, you may find what you in reality seek.

      Today you can not get your information from 1 or 3 sources, you need about 10 and the ability to read between the lines on all of them . Then you get a picture, close to the truth.

      As long as your personal bias, does not confuse the picture.

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