📖 Your Q2 Earnings Guide: Discover the Stocks ProPicks AI Highlights to Jump Post-EarningsRead more

France could be headed for a difficult return to reality - ING

Published 22/06/2024, 05:06 am
© Reuters.

Investing.com – With robust fiscal deficits and high debt, which undermine growth potential, the economic outlook is complicated for France, which will hold elections starting at the end of this month. Parties with opposing views aim to equalize these problems—or at least mitigate them. A report released by ING Economics this week states that France "may be heading for a difficult return to reality."

“It is not surprising that the European Commission proposes placing France (along with four other countries) under Excessive Deficit Procedures (EDP),” notes ING, which believes that the country’s political situation will be complicated and indicators do not suggest the appointment of a prime minister favorable to the president.

“Any desire to break with the past will likely run up against the reality of the numbers. And this could happen very quickly, as the European Council is expected to confirm the Commission’s proposal to place France under the EDP by mid-July, and the country will have to propose a fiscal adjustment path by September 20,” adds ING.

Elections in France

The legislative elections will choose, between June 30 and July 7, the 577 deputies who will serve in the French Parliament. The far-right National Rally party is leading the polls at the moment.

The National Rally has not yet published a detailed budget program, but Jordan Bardella considers it necessary to have a rational approach and conduct an audit of the finances, including France’s social security system, before taking more robust measures.

The bloc of the current Prime Minister, Gabriel Attal, tends to indicate in its program, which should be released next week, themes aimed at seeking greater balance in public accounts, with measures to increase revenue and cut spending.

The prime minister is appointed by the president of France but requires a majority in the National Assembly to govern.

“If the deputies present and vote on a motion of no confidence against the government, the prime minister is obliged to resign. The president can 'counter-attack' by declaring a new dissolution of the Assembly. But be careful, this cannot be done within a year of the previous one (June 2025),” clarifies ING.

Earlier this month, French President Emmanuel Macron announced that he would dissolve the French parliament and call for legislative elections, after a defeat in the European elections by Marine Le Pen’s far-right party.

**

How to invest in an uncertain scenario?

With InvestingPro, you know how to choose the best assets even in challenging contexts. You have access to:

  • ProPicks: Strategies using AI to select explosive stocks.
  • Fair Value: Know if a stock is expensive or cheap based on its fundamentals.
  • ProTips: Quick and direct tips to simplify financial information.
  • Advanced Filter: Find the best stocks based on hundreds of metrics.
  • Ideas: Discover how the world’s top managers are positioned and copy their strategies.
  • Institutional-level data: Create your own strategies with stocks from around the world.
  • ProNews: Access news with insights from the best analysts on Wall Street.
  • Turbo navigation: Investing.com pages load faster, without ads.

Use the coupon BEPRO and get an additional discount in the mid-year promotion of Pro and Pro+. Click here!

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.