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French press review 5 November 2014

Just one day ahead of François Hollande's mid-term television presentation, the French budget deficit makes an unwelcome reappearance on the French front pages. And the fall in the price of oil seems not to be such good news as it might be.

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Le Monde soberly reports that Brussels does not believe in Paris's growth predictions for next year. Big deal! Paris never believed them, either!

The French budget for 2015 is based on a very modest economic growth rate of just one per cent. And, even at that, France's deficit - that's basically the gap between income and expenditure - is going to be way outside the limit supposed to be respected by countries in the eurozone.

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But, according to the men with dark suits and calculators at the European Commission, real economic growth next year is going to be about 0.7 per cent, a situation which will put the French deficit/production gap at 4.5 per cent in 2015 and wider again in 2016. Remember, in line with the eurozone's Stability Pact, Paris is supposed to be getting that key indicator down to 3.0 per cent.

Le Monde elsewhere wonders what kind of rabbits the French president will be able to pull out of his tattered beret when he appears on national television tomorrow night to mark half-time in his five-year stint.

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If he was a football manager, says the centrist paper, he'd have to admit that the first half has been a dead loss. But victory has been snatched from the jaws of public disapproval before now and Hollande does have the second half.

Le Monde says he has four challenges:

  • He must improve his communication skills, explaining what he is trying to do, and why. The French leader has made plenty of public statements in his 30 months on the job, but without the necessary coherence and clarity. There is a danger, says Le Monde, that nobody is listening any more.
  • He could do with an economic miracle. In fact, two. Growth is going backwards, unemployment is, tragically, thriving. The signs for the immediate future are worse than not good.
  • François Hollande, according to Le Monde, needs to persist with the reforms he has undertaken. And he has to convince us that, if we want to profit from the bright days that are just over the horizon, then we have no choice but to knuckle down and enjoy our bread and water.
  • Finally, the French president has to remind us that he has a vision of a better France, politically, socially and economically and that current difficulties are an inevitable part of the journey.

Briefly, those four points come down to two miracles and a truckload of talk.

It sounds as if Le Monde expects the second half to be very like the first, only worse.

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Conservative Le Figaro is delighted to announce that Hollande's rosy economic vision has been shattered by the Brussels accountants. What is needed, says the right-wing paper, is profound political change not minor adjustments.

Over at left-leaning Libération, the main story says it's all Europe's fault in the first place. Despite the fact that austerity measures have failed to work in any country of the Union, the Commission continues to insist on a policy which, according to Libé, inevitably boosts deficits and slows any chances of a return to growth.

Now that Europe is menaced by that other economic nightmare - deflation - even German Chancellor Angela Merkel is beginning to wonder if cutting the amount of money which people have to spend is such a good way of getting the economy moving again. The problem with deflation is that prices are forced down because people have no money, production slows further since very little is being bought and that means an even deeper crisis.

Catholic La Croix has what looks like good news on its front page, reporting that the price of crude oil has decreased by more than 25 per cent over the past six months.

The trouble is, that's not made the price of petrol any cheaper at our local service stations and so has had no positive effect on growth. Worse, the producing countries are likely to see their budget deficit go all French, since they based their predictions on the old price of a barrel of juice.

The one positive side to the oil price slump is that it will weaken the positions of Russia and Iran, the two main supporters of the Syrian regime of Bashar al-Assad, La Croix observes.
 

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