ROUBINI: France’s Economic Outlook Is Getting Darker And Social Unrest Is Brewing
Sep. 28, 2012
Austerity is spreading across Europe today as France reveals its 2013 budget plans.
Newly-elected French president Francois Hollande calls it a “combat budget” – and one of the cornerstones is a controversial 75 percent tax rate on millionaires, expected by the government to raise 530 million euros in 2013.
But regardless of the specifics of the budget, France is facing some big problems.
Nouriel Roubini says France is on the cusp right now and poses the question in a recent note to clients: “A core or periphery country?”
Roubini says that France is currently on “honeymoon” with French investors who have cut their holdings of PIIGS debt and rotated into French sovereign debt due to a “home bias.”
However, according to Roubini, “many problems are brewing in France” at the moment, and there are a few reasons for serious concern if you’re holding French bonds.