Comments on: Monday a new start? http://www.prospect-magazine.co.uk/blog/franceprofonde/monday-a-new-start/ Tim King on French politics Mon, 13 Oct 2008 22:26:38 +0000 http://wordpress.org/?v=2.0.5 by: Tim http://www.prospect-magazine.co.uk/blog/franceprofonde/monday-a-new-start/#comment-36145 Tue, 18 Mar 2008 08:30:22 +0000 http://www.prospect-magazine.co.uk/blog/franceprofonde/monday-a-new-start/#comment-36145 The problem as I see it is that most people (in France or anywhere else) don't see any connection between the practical problems of buying food in the supermarket and the vague theories about exchange rates/balance of payments, which they follow with bemused indifference, whereas they can see their grocery bill increases. But then people's perception of economics/money is a source of constant amazement: even as they complain about higher prices all round, apparently the number of French people booking their summer holidays in the States has rocketed because, they say, "it will be cheaper". It would be cheaper to stay at home - but apparently that isn't an option. You are right that the real economic problem is creeping inflation - which the French president recently rubbished by saying something like inflation is nothing more than an accounting ruse to scare people and half a percent here or there makes no difference! That is because he is in a political fight with the ECB whose primary and principal job is defined as stemming inflation. The problem as I see it is that most people (in France or anywhere else) don’t see any connection between the practical problems of buying food in the supermarket and the vague theories about exchange rates/balance of payments, which they follow with bemused indifference, whereas they can see their grocery bill increases. But then people’s perception of economics/money is a source of constant amazement: even as they complain about higher prices all round, apparently the number of French people booking their summer holidays in the States has rocketed because, they say, “it will be cheaper”. It would be cheaper to stay at home - but apparently that isn’t an option.

You are right that the real economic problem is creeping inflation - which the French president recently rubbished by saying something like inflation is nothing more than an accounting ruse to scare people and half a percent here or there makes no difference! That is because he is in a political fight with the ECB whose primary and principal job is defined as stemming inflation.

]]> by: charlie http://www.prospect-magazine.co.uk/blog/franceprofonde/monday-a-new-start/#comment-36108 Mon, 17 Mar 2008 15:54:47 +0000 http://www.prospect-magazine.co.uk/blog/franceprofonde/monday-a-new-start/#comment-36108 Given the euro-dollar spread, and that oil is priced in dollars, I've seen reports saying the price of oil in euros is about the same as it was back in the fall. And while the rise of the euro might have a big impact on corporate profits, isn't the problem more that french exports to Germany and the UK will be hurt (as those countries will suffer more from an uncompetitive euro/pound). That's why I am curious about the purchase power comment -- it seems the real economic problem is creeping inflation -- and I agree with you I don't see how these structural reforms will help. Given the euro-dollar spread, and that oil is priced in dollars, I’ve seen reports saying the price of oil in euros is about the same as it was back in the fall. And while the rise of the euro might have a big impact on corporate profits, isn’t the problem more that french exports to Germany and the UK will be hurt (as those countries will suffer more from an uncompetitive euro/pound).

That’s why I am curious about the purchase power comment — it seems the real economic problem is creeping inflation — and I agree with you I don’t see how these structural reforms will help.

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