Is the worldwide financial situation about to worsen? The economic climat is definitely not good: the growth is slower everywhere in the western countries and the US is about to start a recession.
The Attali Commission has choosen this unstable period to propose 316 mesures to help the French economy to survive through the worldwide crise. Jacques Attali suggets more freedom and more security to reach an equilibrium favourable to growth. It is time for the French government to make decisions! This difficult period with no forecasted elections is the perfect ooportunity to choose the adaptation rather than the decline. Indeed, the French challenge is huge: In 40 years time, the French growth wnet from 5% to 2% per year. In 2008, the French Balance of Foreign Trade deficit is around E40 billion and the increase in gaz and oil prices are not the responsible! French people consume more than they produce because the globalization allows people to go abroad to buy cheaper... It is the reason why Jacques Attali emphasis on the topic: Education and Research through which France will become more competitive. The strengh of the Euro allows to buy cheaper abroad and then prevent France to suffer seriously from the financial crise consequences.
The subprime crise started in the US in 2006 and now it repends itself as a virus which contamines the whole international financial system.
In the US, the subprimes are financial mortgage with high interest rates, given to people with a weak solvency. Real success! but in 2006, the interest rate increased because lot of people are not able to pay back their credits. The main problem is that the US banks have minised their risks by using money they had not. Indeed, they shared the risk with others American and foreign banks such as the Societe Generale in France or Nothern Rock in Great Britain. It is the whole financial system which is weaken as a consequence of the financial globalization.
The Fed cut its interest rate twice to reach 3% in order to boost its economy with no garantee of sucess because the American economy survival rest on a weak dollar.
At the same time, the Societe Generale, a big French bank, looses E5 billion... The financial market is no longer under control and could be easily compared to a casino economy. The only internal control is not enough! Now the only goal of banks is to make still more money through risky financial placements that the deregulation makes possible. The case of the Societe General is not unique! The governments need to make more ethical the capitalism system and ask for more transparency on the financial markets.
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