Forex »

French Consumer Confidence Stalls

James Boston
Share on StockTwits
Published on
www.finances.com
French Consumer Confidence Stalls

French Consumer Confidence has remained static this month, at least on paper. The downward revision of the September figure from 86 to 85 means that today’s October number of 85 appears to hold the status quo, the market consensus estimate was for another reading of 86.

The socialist government of French President, Francois Hollande, last week was forced to openly announce a rejection of austerity due to growing public and political pressure. Such a pronouncement however suited the French authorities as they build their case to seek some leeway from the European Commission on the their strict enforcement of the 3% budget deficit policy. France has previously announced that it would be 2017 before it’s budget deficit would come in line with the EU economic guidelines and went ahead an planned a 2015 budget that would breach openly breach the deficit limits. Today is the final day for submission of 2015 budgets to the EU and France would have faced heavy penalties and some diplomatic problems if they had not managed to hammer out a last minute deal yesterday. The details of the deal are not exactly clear but the nature of it would mean that France will still miss the deficit target but not by as much as originally planned, the compromise is likely to leave the French government having to find as much as €3.7Bn in additional cuts next year.

It is understood that the German government was unwilling to give any ground in relation to France’s request for additional scope in it’s budget deficit. It appears that Germany is sticking trenchantly to it’s austerity policy despite the fact that it’s own economy is beginning to slow. Germany however felt itself isolated among the larger 18 member group of Eurozone countries, many of which feel that increased spending is the only remaining option to stimulate growth within the EU.

Share on StockTwits