France And Reforms: A Comparison With The U.s.

Evariste Lefeuvre picture

Which cover: new articles | breaking news | earnings results | dividend announcements Get email alerts on This article was sent to 311,537 people who get the Macro View newsletter. Get the Macro View newsletter France And Reforms: A Comparison With The U.S. Sep 23 2013, 16:01 by: Evariste Lefeuvre | includes: EWQ , SPY BOOKMARKED / READ LATER Added to your bookmarks on the Seeking Alpha homepage Remove Bookmark Bookmark Save this article to continue reading from your iPad Get the app It might seem a strange to compare the French and US economy given the huge differences in terms of size, institutional setting, and regulation, to name a few. Yet, both economies provide good examples on how market forces and fiscal policy succeed (or did not succeed) in correcting imbalances. 1. Similarities: In the years leading to the crisis (and the post-crisis years in France), domestic demand has persistently grown at a pace above that of GDP in both economies. If the outcome was the same – a widening of the current account deficit – the cause were clearly different: i. Never-ending growth in indebtedness for US households resulting from the housing bubble but also from the lack of sufficient growth in real wages to maintain a high level of consumption. ii. A disconnect between wage growth and the state of the labor market in France, due to the administrative growth in the minimum wage (SMIC, to which many medium range wages are implicitly indexed) and the existence of an “insiders job market” (wage, not jobs, will grow during a recovery, meaning a price vs. quantity adjustment). (click to enlarge) 2. Differences: for the reasons stated above, the outcome has differed strongly in both countries with completely opposite consequences in terms of aggregate distribution of income. i.

France expects U.N. Security Council to agree Syria resolution

“We should take exactly what was foreseen in Geneva,” Fabius said. “On that basis we should come to an agreement.” Fabius appeared to confirm France’s willingness to accept Russia’s demand that the current draft resolution not be enforceable under Chapter 7. According to the Geneva agreement, the Security Council would have to adopt a second resolution in order to punish Syria for any non-compliance with a U.S.-Russian plan to eradicate Syria’s chemical arsenal. Russia and the United States brokered the deal in Geneva in mid-September to avoid possible U.S. military strikes. Under the deal, Assad would account for his chemical weapons and see them destroyed by the middle of next year. The deal stipulated that “in the event of non-compliance, including unauthorized transfer, or any use of chemical weapons by anyone in Syria, the U.N. Security Council should impose measures under Chapter 7 of the U.N. Charter.” Envoys from the five big U.N. powers – the United States, Britain, France, Russia and China – have been meeting in New York to negotiate a draft resolution to place Syrian chemical weapons under international control. “Regarding the Russians, it would be difficult to understand that given they themselves proposed the ban on chemical weapons that there would not be an agreement to apply what they proposed,” Fabius said.