The French Debt Crisis Explained
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Into Europe: France's Debt Crisis Explained
Find the scripts and sources on the Into Europe website: intoeurope.eu
0:00 Introduction
1:11 1-France's Debt Build-Up
4:04 Sponsored Segment Learn Programming
5:01 2-What France Spends Money On
9:24 3-What Can France Do?
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Contact information:
Email: Into.Europe@outlook.com
Twitter: / europeinto
Patreon: / intoeurope
LinkedIn: / hugobezombes
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Forget programming, AI and robotics will change the face of the world in 30-40 years... Almost all the subjects and discussions today have no real future...
POV me an italian finding this video in the feed: yo, wtf?? 😓
Greece: first time uh? 😅
Ever seen the Watchman River channel?
@@bighand1530 nope, why?
Don't use Black American slang.
@@jasonhaven7170 Force me
@@jasonhaven7170 make me
That video nailed it so much lol.
As a software developer in France, I am very much thinking about leaving, my sister already left for Australia. That pains me a lot, as I love my country and my city + my parents will really suffer from another of their children going abroad.
So I am staying, prayer for it to become either better, or so bad that I can leave without any regrets.
Why did your sister choose Australia and not another country in the European Union with the freedom of movement like Germany or Finland, which would’ve been easier to move to?
@@artman12
She like the country and salaries are way better in Australia than in Germanic or Nordic countries.
I also think about going to Germanic and Nordic countries instead of that far away, but I did 2 years in Sweden, and it's that far from France issues.
@@artman12salaries are much higher in anglosphere world like Australia and US
@@abdiganiaden
So is rent and cost of life.
@@mrsupremegascon Come to denmark :) 2 hours with flight from Copenhagen and Billund. And if you speak English there will not be that big of a language barrier, compared to Germany i assume.
Italy GDP growth 1% of GDP
Budget deficit 7.4% of GDP
Eurozone crisis 2.0
Lol europes a mess.
This is about France not Italy so why you throwing that in?
According to the German institute Stiftung Markwirtschaft, in 2018, the aggregate explicit debt + implicit debt of Italy is 122%, lower than the German one at 170%.
@@kordellswoffer1520 Japan debt = 263% of their GDP - USA debt = 117 % of their GDP.
Debt isn't the only number you should look if you want the strength of their economy.
Every country is a mess. There's not a single country rn that's doing well
@@alganis3339 it’s not. It’s just one of them
And Japan is a mess. Their future is stagnate and grim. America is also a mess.
So every country that was doing swell actually was just kicking their can of problems further down the road so appears they doing well but just delaying inevitable failure
france was definitely not doing well, its gdp didn't move an inch while public spendings were exploding. I think there is a hidden recession, and the country is struggling to create value with all its talents immigrating to other countries.
@@luxraider5384 France and Germany two powerhouses of EU.
@@MbisonBalrog france barely produces anything.
Politics, in a nutshell. Every government wants to create the illusion of prosperity by juicing the most commonly used metrics like GDP and growth, typically with the use of debt. Rinse and repeat with every new government.
@@MbisonBalrog Germans are broke because the US exploits them with overpriced LNG.
France will now notice less profits from selling Free Uranium from Africa.
The Conquest to the World by the G-7 Colonial Empires,
looks like it has hit a rough patch,
economically speaking?
My god, the UK is as bad as Italy in terms of interest payments to GDP. And 2-3x as bad as France! What have we done?
Great question, what has the UK done even for itself?
@@Somerled_Poxa lot, if by for itself you mean the rich
we make lots of money, you just don’t see any of it. the western world collectively demonised anything leftist, now enjoy your capitalism 😂
Sunctions?
Installed two clowns to lead us, Sunak and Hunt 🤡 🤡
Here in Italy, the government will have to find 8 billion euros by the end of the year to meet the demands of the European Commission.
At the same time, 20 billion euros will be needed to maintain the relatively small tax cuts introduced by Meloni next year as well.
Of course the government is looking the other way because European (+ local, in some regions) elections are approaching.
In the next few months, however, Meloni will be forced to stop making promises and make some tough decisions.
Or she could get her act together for once and leave the eu zone like she use to promise. It won't reduce their debt but it will help Italy having a higher gdp growth and reduce unemployement. It will also give the option to the Italian state to cancel part of their debt (which will probably enrage the other eu member if they decide to do but it is what it is).
Italy needs Milei. The world needs Milei
Selling off government owned enterprises is a start. But it cuts revenue from those ventures.
@@nono114499 leave EU to do what ? Italy is not UK, we have a big debt towards european banks and they give it on really low interest rates too.... if we leave EU it will be over, caput, end of country... my university teacher told us that once we leave, we will need 100 years to return to how we are today, because of all bankruptcies and devaluation of money, because of course we will get back LIRA... it's too late to leave, we should've never gone in tho... big difference.
@@nono114499 Higher gdp how ? it will get lower because of all the bankruptcies, it will be a bank run, many of which will close.... Unemployment will skyrocket, no one wants to work in a failed state, many industries will close, if not for that then they will close because of banks collapse... How can Italy have the possibility to cancel half of their debts ? If they try to do it, no one will even give money to Italy, at least from western world, but even countries like Russia, India, China will give money but on a much higher rates compared to EU countries... also no external Bank will want to have anything to do with Italy...
Banks are extremely important, we almost had a bank run in 2017 but it got saved with government investment...
Sometimes I wonder if you people have finished an economy or political school before writing such bs...
I love these videos from Financial Harry Potter.
He's french pronunciation is perfect, he probably is, at least partially. A french speaking economics pragmatically definitely needs to be a wizard
To understand the retirement problem in France: For 1000 euros spent, 265 are for retirement and 232 are for health (which concerns mostly old people)...To compare, education, it's 91 euros.
Also, it's important to know who own the debt...In France, 49% of the debt is own by french. It's bad but it's better from ealier when it was less than 30%
That 265 will get better returns if invested in a standard ETF. Why is it the government's business to take control of our retirement plans. Reform is needed
Same problem in the Anglo world, most of the mo EU goes to the old and sick, no investment in the young. The boomer generation has abandoned their children, we are on our own.
@@hidir3532 The government tried to reform the national retirement plan before the pandemic, more than 80% of the population were against. The majority of french people are financially uneducated, even those who are considered rich are vastly ignorants in this matter.
So basically another Japan's case in EU.
@@ThomasHldvBecause the people instinctively know a change being led by Jupiterian Macron can't be good for them. And they are right.
France has become a two speed economy of 6-7 metropolitan citadels of globalised integration (with Paris as the Jewel of the Crown) that creates economic dynamism and generates high paying jobs to finance the French states and the peripheral France that's been left behind and needs a constant influx of capital support to maintain a quality of life for a large part of the population which has been excluded from these opportunities. The geographer and writer Christophe Guilluy writes about the reckoning now facing the French ruling class as a result of it's constant inability (more nihilistically, perhaps unwillingness) to create widespread and inclusive growth. Government spending levels in of themselves do not denote good or bad economic policy. A more useful examination would be whether or not that spending is productive investment in human and industrial capital - which it is not.
Nope this is not the UK. Paris is in a bad state compared to its suburbs in terms of infrastructures and new residential buildings
@@user-gr3uv7wy9fwhat are you saying? There is no new buildings in Paris or very few.
La Defense is a jewel in the crown. Most of Paris is not a global superperformer, but a bureaucratic supercentre.
@@walideg5304 your 3 towers are cute do you live there ? No you live in greater London between Rayner's lane and Uxbridge loooooool. The red houses are all in a bad state what are you talking about? Paris is in better shape, and greater paris has new residential buildings everywhere. Your houses do not exist there. We have American houses sorry. Stratford is nice though
@@themsmloveswar3985 Paris is indeed a super performer. World leader in luxury and fashion, world leader in tourism, top 10 as a financial center, top 5 regarding the startup ecosystems.
4 universities in the top 100 in the world.
If it’s not a super performer then a I don’t know what it’s. Paris region itself is 30% or France GDP.
Italy is always in crisis, since the end of ww2.
Do you mind how many times happened to see such titles? "Italy is on the brink of collapse". And then we are still here.
😂 from their point the whole world is collapsing because every wealthy country is suffering from the same problems to varying degrees.
I’m from Portugal is like people saying Brazilians are taking us over but they forget that “There is a people in the far reaches of Iberia who neither govern themselves nor allow themselves to be governed” we kicked out the moors,jews,spaniards😂
@@santostv. hey, Spaniards are brothers. 😤
@@danielefabbro822 They are nuestros hermanos now but 500 years ago they weren’t.
@@santostv. we all had our precedents, that will never delete our commond blood.
Hermanos fino a la muerte.
@@danielefabbro822 Correct 👍 my Italian cousin
Successful entrepreneurs are fleeing the country's exorbitant tax rates and terrible business incentive structure.
Socialism
Business incentives aren't lacking that's for sure.
But the BIG problem is the enormous, fragmented and bloated technocratic bureaucracy.
So much delays, so much money wasted.
The tax structure is outdated as well. Still on work and production.
We really really need to shift it on consumption like Nordic countries.
This way, cost of labor will go down and businesses will be able to grow.
@@visitante-pc5zcunfortunately for you, it's not socialism
I'm italian and I would really like to watch a video about Italy, using the same kind of analysis and approach.
italy is a shitty, terrorist state.
France has debts it doesn’t even acknowledge. There’s £750.0 owing to Britain which hasn’t had a penny paid on it since 1931, and $1.1Tn owing to the USA since 1932 with nothing paying d since then either. Each unserviced sovereign loan is chewing its head off in interest at 5%.
From memory, the U.K. is the only country to repay its post-WW2 debt to the USA.
@@gaynormca8992 No France finished to pay it in the 70s. You can easy google it.
@@gaynormca8992 Ah no. The UK did not repay its WWI debts or WWII debts to America because it omitted interest, which meant that inflation did most of the work. Australia is the only country to pay both world war debts, with interest.
@@seanlander9321 I did say it was from memory and I was at least partly right! I never saw anything about the U.K. failing to pay interest. And well done the Aussies for repaying the full amount 🇦🇺
@@gaynormca8992 Britain also borrowed heavily from Canada at the outset of WWII and made the same repayments as the American loans, being interest free.
Interestingly in WWI, Australia had run out of money by 1917 so borrowed £96.0M (half its GDP) from Britain which had borrowed it from America, and Britain was not paying for grain and wool until the war ended. After the war every country that had borrowed from Britain was given a discount, delayed payments, trade deals, or loans forgiven, except Australia which was singled out for repayment in full with a profit component of interest above the cost of the American sourced funds. To paraphrase the Hansard record; the Australians needed to be taught a lesson about fiscal responsibility. It took until 1936 to clear the debt and obviously that added to the difficulties of The Depression. The absolute dismissal of Australia continued to 1953 when the London Agreement concluded the terms for German WWI reparations on the condition that of all the Versailles signatories or successors, eg Ireland, Australia alone was not to receive any payment on its £426.0M owed. Britain eventually received half the WWI German reparations and interest with payments ending in 2010.
The outstanding WWI loan though is the Churchill-Caillaux debt agreement where the French suspended repayments on £640.0M in 1931 after Parliament agreed a year’s grace. Not a penny paid by France to Treasury since then and the interest is 5%. The French claim that because Parliament hasn’t called on them to restart payments that they don’t have to. No parliamentarian since 1932 has tabled a motion for France to recommence payments on sovereign debt or to sell the Treasury bills securing the debt. So there you have it, for all Australia’s support for Britain in two world wars, the Brits gave better favour and closer allegiance to the French and the Germans.
The main difference is that Italy has had a primary surplus on its budget before interest payments since the 1990s and as you mention France hasn’t since the 1970s. And that is taking into account the CFA subsidy/seignorage benefits.
CFA bullshit.
Your point about debt not being a problem if used for investment is spot on. We have been trying to spread this message at the National Economics Forum in the UK.
Absolute incredible Macron pushing through the 64 retirement age. Reminds me on Gerhard Schroeder pushing through Agenda 2010 in Germany cutting spending and setting up everyone against him so much, he lost the motion of no confidence and initiated early elections in 2005, which he lost to Merkel. Macron doing a similar huge move against his own voter base is just incredible. Hopefully you can solve the debt crisis sooner than later rheinic siblings.
his voters were already retired by the time they voted. In their mind, pushing the retirement age was a good move because the instability from revolt was only short term meanwhile going to the root cause of the problem could very much change how things run in the country, therefore putting their little vacation to a big rumble. Basically retirees across all europe want the least change possible to the social system because they benefit the most, plus they are boomers so they are stuborn and egotistical (especially in France, honestly thinking about how to better society is an Asian / Protestant thing to do, which France is none)
As stated, it’s not his voter base, because they are all retired or soon-to be, and the retirement age is increasing by 3 months per year. So people that were expected to retire in 2 years for example will only have to work 6 additional months.
I’m not fond of this reform, because in essence, it continues to make newer generations pay for it. It guarantees current retirees the same great benefits they have always enjoyed despite retiring earlier and paying fewer social security contributions in the past (there were fewer retirees back then), while the newer generations have to pay this huge amount of taxes at the moment, work longer and will also have lower pensions because pension growth has been regularly frozen by the government, and this will have a compounding effect over the years…
All in all, a not so courageous reform, especially given the scale of the problem.
It should be linked to life expectancy like in my country and others and eu should create a suplementary private pension fund option.
@@lutintarzanSo true. France is very much a Latin country with a Latin mentality, exactly like Italy, Spain, Romania and the French speaking part of Belgium ( the French Swiss are more " germanized" in a way )....
@@santostv. We have the supplementary private pension funds already, the problem is that so much of your paycheck is already taken by the public pension system that you must earn more than average to really use these schemes.
Sweden and Finland has 3rd and 4th biggest unemployment in the EU…
Cause we (atleast sweden) have centralised the same way many other countries have, unless u live in a big city you wont find a job.
And its exoensive and u need a degree for everything
Mine is 7th and France is 6th it could be better but I don’t think it’s that bad ,in 2013 my country had 17% unemployment rate, also 0% unemployment rate isn’t good either.
In my country most live by the coast is were most jobs are.
Excellent video Hugo,
Really nice video! I think you approached a really complex and nuanced problem with a lot of grace and impartiality. 👍
Let's talk about productivity, cause there's somethign I do not understand here. The manifacturing sector in 1984 used much less efficient means of production compared to today (no internet, primitive automatization and less technology in general), the working population was much less educated and the public sector was less efficient (again no internet, minimal digitalization). I work in the biotech sector, and the progress that occured in the last 30 years is staggering, scifi-like. So, I guess one working hour in 1984 yielded much less than 1 working hour of 2024, so the productivity must have increased, right? And yet, a western european worker in 1984 could afford to buy a house and go to holiday once a year, while having enough spare time to bring up a bunch of kids. Now, we work more hours (who does only 40 hours a week here in Italy? seriously?), with much more advanced means of production, and yet we are told that productivity decreased and that is why we can barely afford rent in a medium size city (let alone bringing up kids without the help of the elder generations).. Where do all the value that we produce go? Where did all the money go? Does this have anything to do with growing inequality worldwide? Thus, maybe it is not true that taxation is too high for the rich! Maybe they have plenty of means to evade it, and they are seizing all the value that we produce, letting us do all the dirty work while they enjoy their yachts in Sardinia. Am I wrong?
Were you read that productivity has decreased? Everything i read says the opposite.
I’m from Portugal the old people only have houses because of inheritance and foreigners money (Germany,uk) they payed high interest rates for it.
The 08s did a number on us and they chose f austerity to solve that imo was a mistake, here the country is badly runned,corrupt and business are known to have influence over them, about housing because again 08s barely new houses were built leading to low supply and with a aging population I guess it made sense but them they are the brilhant idea of tourism so demand for short term housing increased then oops this is working but wait nobody wants to work this sh&tty jobs, new brilliant idea migrants but wait we pay badly and no one wants to come another genius idea appears free eu passport guys it works results more demand for housing that nobody has been building since 08s, politicians damm my houses were work 500 thousand now they are worth 1,4 million we can’t go easy on bureaucracy for new houses, real estate developers damm the government solutions worked look at those expats from usa/uk ect we can get they money, nice so they earn three times more so why not build luxury houses that they can easily afford and think is cheap muahh end of history 😂
Productivity went up for a long time, in large part due to computers. Wages did not keep pace, and the difference mostly went to the rich.
As for housing, it has a lot to do with land costs driven by a liberal mortgage system with low interest rates. In the 80s, it was typical to buy a house for quite cheap, but monthly payments would be similar to now due to high interest rates of approx. 20%. This is much more feasible for most than the current system, with similar payments but now you need to have a large down payment as well. It was well intentioned, but in practice a disaster.
Productivity loss is a bogus argument indeed. It only became an argument when the owners of capital decided that the share of income going to employees needed to be reduced.
@@oldskoolmusicnostalgia that's the same feeling I have
@@windhoek_stallion8455 but why is being lazy a problem? I can understand people living in a state of emergency (wars, natural disasters, poverty) working their asses off to try solving urgent problems but, considering the technological achievements of the last 30 years, we should be able to work less and do more than 30 years ago. How come we work more and get less? Consider also that the only real emergency we are facing is global warming, which would definitely benefit from people doing less and relax more (unless doing means actually workomg your ass off to try finding a solution that is yet missing)
To me, the big issue with France's public finances is the fact that pre-funded private pensions are comparatively rare, so most people's retirement relies on public pensions. This is an issue as these are ultimately funded through current day to day spending - i.e. they ultimately represent a liability, rather than the draw down of a previously accumulated asset.
As per the OECD's "Pension Markets in Focus", in 2021 France only has funded pension assets of 12.1% of its GDP. While this is better than for Germany (8%) and comparable to Italy (12.7%), it is vastly behind the likes of the UK (120.5%) and the Netherlands (213.3%). France in practice has to keep its public pension generous to avoid pensioner destitution, while the UK and Netherlands can reasonably treat public pensions as a safety net.
Private pensions are not politically appealing in France, which makes sense since it has the same flaws as insurance: the rich get the most advantages for a lower price/quality ratio while the poor may not even get anything because they prefer/need to spend their smaller amount of money on other things. In fact, quite extensive insurance is mandatory for homes, vehicles and a few other things in France. Meanwhile, public insurance is also considered as safer.
There are plenty of issues with having a primarily private pension system. Most of the money goes into real estate (Renting properties out to workers) Much like French taxpayers we are also funding pensioner's retirements. For us it is through rents as a proportion of income as opposed to taxes.
In my country housing is their retirement insurance that allows to live a ok life with a low pension but because life expectancy increased there more old people and even with low pension is too much we have 180 old people for 100 young people and some people are getting retirement without ever putting in it because in the old days were possible, others their retirement was calculated based on the 10 years they earned the most, also because they live longer despite most owning their houses it takes longer for family to get their inheritance,although a awful thought if they died early a lot of young people would get a house or money from the sales of the house for a downpayment ect.
We need pension reform and a private pension scheme in the eu but because in countries like mine most people are financial illiterate it would need some guidelines, technically we have them it’s called ppr but some don’t even make almost any money.
To estimulate the economy and compete with the USA we also need a eu stock market but eu countries would need to give up “sovereignty”
Good and relevant analysis. The remarkable thing is that the EU is keen to enforce the competition rules, but the Growth and Stability Pact has never been invoked. It is a relevant analysis because it is one of the most predictable crises, but it does not receive much attention. If you listen to Macron and Le Maire, they are more interested in passing the bill on to the EU in the form of taking on common debt instead of living within their means. It is a fine example of what Thomas Sowell has said before: The first lesson of economics is scarcity: there is never enough of anything to fully satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics.
The EU doesn't care about france at all, its objective is to make a uniform europe that is as a whole developed, therefore it pours billions into eastern europe countries.
At a time when the USA is engaging in massive "stimulus" (i.e. debt and money printing) to boost its domestic market and local industry, financial stability rules risk putting the EU perpetually behind. It's not an easy decision to make - it might be much easier if others like Japan and the USA were not simultaneously resorting to ever more debt and deficit spending. The allowed deficit according to the EC's rules is 3% of GDP, while the US is running deficits of 6-7% of GDP. Twice as high, with the numbers being in trillions - not 1000s.
@@oldskoolmusicnostalgia I agree with you that there are no difficult decisions to be made. Where we may disagree is that I prefer that those decisions are made by those who have skin in the game and not the government. France in particular has shown over the last 40 years how bad their government is at allocating the population's capital. What we can perhaps agree on is that it is about being marginally smarter? Because others make less wise decisions is not an excuse to follow suit.
Nice video Hugo, I wonder what are the governments going to do since this problem is shared among other economies in europe (Spain or Italy to name a few, where pensions became the main social expenditure) will they become more endebt, will they put any measures in place (like increasing retirement age) or will they just wait since this is a transitory problem generated by the baby boom generation?
Europe: *Treats its young professionals like shit, requiring tons of qualifications for a shitty work environment and pay and then taxes on the little they get for pensions that they don't promise would happen for them next*
USA: "Hey look kid, we can't promise about the not treating you like shit part, but we can compensate with 6 figure salaries and 401k with Roth IRA"
Doctors, Programmers, Teachers, etc: *Leaves for the US or other countries which are willing to compensate their efforts and investments*
Europe: *Surprised Pikachu Face*
Thank you very much for making more videos about Europe! I like your videos about Norway and other Nordic countries
as i often say to my relatives when this subject comes up, a first step should be to simplify and cut down the amount of administrative procedures , automate bureaucraty using more algorythm (as processing data and applications following a rigid set of pre-etablished rules is literally the type of work an algorythm is the most suited to) and then fire the now redundant paper-pushers. allow organisms to exchange data within themselves (so that you, as a citizen, don't need to fill multiple times the same informations to send them to every single public organism)
another way could be to have a very clear and net separation beetween vital/important medical care (like heart surgery, asthma related medication like ventoline, bone repair....that type of thing you know) vs unecessary stuff (and to have social security only cover the cost of necessary stuff. ) as there is a clear difference beetween survival+ staying operationnal for work and simply comfort.
another one could be to just erase the current retirement system, and instead, for people who's health no longuer suffice to accomplish their work, give them the AAH (allocation adultes handicapés, wich is money you are given when you suffer from a health handicap judged enough to hinder your ability to work. at a full rate, this allocation can reach up to 950€/month, wich, if you are doing nothing of your day and living in a small place in the countryside and don't have other people to financially support, is enough to decently get by) so that people who still want to have a lot of income in their old age and are still in good enough health to continue their job, have to continue it (and if they do not wish to work, then they should sell the housing they got in cities, go take a much cheaper one in the countryside, and settle for 950€/month of income)
The problem of the modern EU and USA is that we are addicted to debt and overexpending. We are destroying our own future
EU, USA and China as well. Modern economic growth is being based on debt, which carries its own risks.
usa is doing fine. its eu which is exploding
Debt is good if controlled ,better than austerity I talk from experience.
USA debt isn’t a problem despite what Americans say because the usa has the biggest military and still are the world reserve currency.
In the eu we got railed by 08s financial crisis and they chosed austerity and we let the USA take the lead from some reason, Germany loves money so they didn’t invest it and now are seen the consequences of it.
@@santostv. Of course debt is good, until you can't pay it and run out of money, ruining the country's future. Debt has literally make us fall into the worst inflationary crisis of the last 50 years
@@Almirante1741 it’s would be worse if they used the other option instead of having low employment you would have high unemployment.
A country that doesn’t invest gets left behind off you need something to back off that debt or investors run away.
Welfare isn't better the bigger!
Excellente présentation! Bravo. 📊 📈 📉🏆
You are still looking on government regulation as a problem. "Free business and they will bring us to prosperity". The will bring us to poverty instead.
The main problem of capitalistic counties is profit. Make the profit = 0 and the most of the problems will disappear (with businessmen).
"Profit = 0" is only possible with capitalism based on perfectly competitive markets. Government regulation/intervention is what creates non-zero profits, often in an unexpected way.
@@Murmilone You are right. Forcing other countries (by army or corrupcy) to unequal exchange makes profit. But it is such a strange competitions - under bombs and gangs. Governments interventions - do you mean "borrowed" money? It is loss for country, but profit for businessmen. Plus + minus equals 0 again.
Very interesting review of France's economics.
France also maintains territories all over the world that depends on it rather than a progressive economic entity. Streamlining bureaucratic inefficiencies in public service will force civil servants to increase productivity which is a necessity. France has parallels to it's neighbor Italy & Spain.
At least Italy and Spain don't have to spend billions in expensive overseas territories ( French Guyana alone has the size of Austria, nearly the size of Portugal ) and military bases in West Africa
1:53 - that's the key - #Demographics - shrinking working age population, dramatically so among native white #French, and losing their crutch of their control of the #CFA countries is turbocharging the problem.
Retirees should have made more kids. Maybe retirement should be based on how many children one person had in their life.
Believe it or not it's actually the case in France, you get a better pension if you had more kids. It's not a huge difference but it exists.
Gérontocratie
hey into europe.
I really like your channel, and i think you do a necessary and important job.
but I'm sad to report this is another controversial topic.
You didn't mention the 3% rules justification.
it was introduce by FRANCE for the mastricht treaty. (jacques Delors , french left)
it was a way for oppositions to ensure economic stability, as the budget of the state in France can be implemented without a parliamentary vote (49.3).
In France, it became a liberal talking point against welfare state.
and a socialist point against companies subsidies and fiscal exoneration.
anyway last decades , the center right were winning this argument.
(that's typical self harm from the french left).
Maybe, just maybe ... our governments shouldn't go to davos with the cryptobros every year.
Hey, interesting point on the 3% and its origin.
I don't see however how that changes this story.That rule means that France (and Italy) will get in trouble for their deficits.
But even without the deficit rule, France would have problems of deficits and public spending and the negative consequences linked to them.
The only difference now is that there is a 'cop' that at least nominally has the power to punish countries for this (good or bad).
Cheers,
Hugo
@@IntoEurope I would enjoy you looking into debt in the EU general in the future. The fact is that government debt at a national level doesn't matter as long as it is issued in the governments own currency and the state has sovereignty over that currency.
That's why Japan can get away with having such a ridiculous level of debt and functionally still be more or less like any other developed country with an aging population.
The difference for national governments in the EU is of course that they don't have sovereignty over the currency, the EU does. This essentially ties the hands of European governments, as we know there is a massive investment backlog in multiple things the EU needs, and national governments are at a point where they can't really take on more debt without violating their own rules, even though they wouldn't really harm anyone nor themselves by taking on that debt.
It seems to me that the EU should seriously consider making debt a collective issue over the coming decade, if we ant to stem the tide of an aging population and climate change we need the monetary power of the ECB.
@@michelangelobuonarroti4958 "It seems to me that the EU should seriously consider making debt a collective issue over the coming decade"
I don't think this is a good idea in the current situation.
The EU is too inflexible especially with its voting rules. ( unanimity principle )
I imagine it would go like this.
EU : We want a fund of 10 trillion euro to fight climate change.
Some of the countries : Yeah sure BUT only if I get ....
Great video. It's interesting to see other countries' economies from my US perspective. My 15% capital gains tax doesn't seem very much in comparison lol
It's just... so pathetic how many modern Western nations are powerless to fix themselves. France is hardly the only country living beyond its means, yet any move to rectify this is met with large scale backlash.
Future generations will look back, utterly confused why such obvious problems couldn't be fixed, and suffer the consequences.
The future generations won't be European, and that's good.
That's unfortunatelly not only a problem of those Western nations, there are many problems in today's world that could be fixed very quickly and we as a society don't have the will to change that.
@user-nw8zm2wu6o The money that countries are sending to Ukraine is irrelevant compared to the general budget of each other, with only very few exceptions. And military aid in form of money doesn't go to Ukraine, it goes to your own country, to military companies in your domestic borders.
I think France has a specific problem (maybe also similar in Spain and Italy) in that French people rely way too much on the state to solve issues, to fix their lives, to reduce inequalities etc. As shown in this video we already have the highest taxes, yet you will find about half of all the politicians think the solution to every problem is to increase taxes. It's crazy.
I used to be left wing, my first vote was even for the far left, and the communist ideal appealed to me, even if I already thought they couldn't really work in practice. But after a few years working and seeing how much money is taken out of my paycheque to go into this dysfunctional system, I'm much more economically liberal and reject completely all these tax fanatics.
Like mentioned in the video I would definitely leave for the USA if I could.
Each time we have conflict interest with germany or UK this type of video pop's up. Debt crisis doesn't depends of how many you how, but reputation.
Seem like someone want to play that game.
I love when the eu lets bigger countries have way higher deficits, gotta love the double standards.
it’ll all even out when they let Ukraine into the EU 😆
If Greece goes bust it's Greece's problem if France goes bust it's the ECBs problem.
Because they are big , just like the usa can afford having high debts, it’s not double standards because if Germany and France fall we all fall.
The EU doesn't have control over countries, especially countries that give more money than they receive. Therefore they have no obligation.
@@luxraider5384 ????? They literally have control over certain things, to join the eu you give up a part of your sovereignty. Just don't comment if you are fucking clueless please.
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The French countryside is in terminal decline. Ghost towns and terrible transport. The lack of income is extraordinary.
i love your videos i love learning about eu and individual countries from your videos
In the first graphic at 0:19 additional Information would have been nice, since like this, its just random lines on a graph. Otherwise a good video.
It is often the expected outcome that the bill is passed on to the minority because it is the majority that gives the outcome of a general election. However, does it make sense to tax the most productive more progressively? In addition, you always have to ask yourself when changing incentives and finances: "And then what?". Increased taxation makes goods and services more expensive for consumers and wealthy individuals can move to more friendly countries. The goose is an excellent description for exactly that.
your voice is good, can you please tell me which mic you are using?
It's interesting that the French call their administration after a cake, it gives new meaning to 'let them eat cake' hahaha, they certainly did!
France has a target to achieve that isn't detailed here : fight corruption too... End all the big and little "arrangements" and regive value to healthy money expenditures.
this kind of issue was one main issue why ussr collapsed
Thank you for the brief lesson in "Why you don't give up monetary sovereignty."
Unemployment in Italy is 7.2% not 8.1%
Was an entrepreneur in France 2 years ago through micro enterprise system, worked great and tax was faitly decent. It was sadly capped a 75.000€ turnover per year.
Last year I couldn't meet the criteria anyome and was advised to open a kind of LLC.
The overall tax was a whooping 55% all included !!!
Needless to say : i fucked out of this crap and went to Bulgaria.
I will never go back to my country to open a business ever.
As a Bulgarian, I find this bizarre.
Doing business here requires a lot of connections to the right people. You also have a lot of headaches with the corruption and lack of institution to defend both workers and small businesses
Tu parles des taxes sur le salaire des gérants d'une entreprise pas des taxes sur les dividendes que tu peux toucher à la fin de l'année. Deplus il y a des avantages fiscales pour une SAS/SARL que tu n'as pas en tant qu'auto-entrepreneur. Il suffit juste d'avoir un comptable qui t'explique tout ça.
I bet you were doing something wrong because explain what the richest people in the world are still doing in Europe.
What your business? Going to bulgary to do what? A austerity lifestyle because from my understanding Bulgaria compared to France is still poor.
@@santostv. Bulgaria is very poor and very corrupt - like the worst when it comes to these two categories in the EU, with Hungary under Orban deciding to race to the bottom for it.
@@Fruzhin5483 Nothing against Bulgaria,I’m from Portugal also a country with unfulfilled potential but the commentor wasn’t a successful businessman.
Why change from a country with 67 million potential customers plus francophone countries to a country with 6 million population.
Gdp France per capita: 40 886$
Gdp Bulgaria per capita: 13 974$
Gdp Portugal per capita:24 515$
Only poor people (for their country) and retirees downgrade.
Great video! Seems like an impossible problem to solve :/
Some people in the comment section don't understand the root cause of the higher working hours and worse living standards. The aging society took away the total productivity within the country is one thing, the other thing is that the Chinese squeeze your country's share of the GDP around the globe. EG, in a hypothetical world, your country's GDP used to be 10% of the world's GDP, so you are rich, especially the way GDP is C+I+G+X where X is the export (when you export stuff, you add other countries' GDP into your country, whilst subtract other countries). Now your country barely makes 3% of the world's GDP, so you are no longer rich... Hence the way to solve the problem in the West could very simply be to "Force China to stop their state subsidies and stop artificially suppress Chinese wages, so Chinese people can consume the excess capacity internally whilst improving the livelihood of Chinese" But China decided to just flood the market and bankrupt your company then steal your GDP by making your country deficit in trade.
Many commentators make a simple error of assuming that EU countries are monolithic and discrete economic units - albeit that the individual states provide the budgetary and fiscal framework for business and public services to operate. Like many of you I have for years been waiting for individual states to collapse under the burden of large fiscal deficits - I have been soberly re-examining my prejudices and have concluded that the motors for the survival/success of countries have to be seen in the ability of all businesses to operate effectively at the European continental scale with important regions so well linked dynamically that they do provide the output needed to generate GDP surpluses across the wider market and in exports worldwide. Austerity such as that operated in the UK have produced shrinking economy and decline. European G7 countries are still fairly robust as France Germany and Italy have been even when such domestic problems have manifested themselves and Fiscal Rules exceeded. The UK is a telling example of a SMofE in the making.
This gets real.
Great video.
I think dumping in a statement that the French economy is over regulated is more than a political statement than one of economics.
Some in the U.S. believe that there should be no regulation. I Europe the position is generally that markets and manufacturing need regulation in order for the markets to work effectively.
I think what you might have wanted to say there got lost in your brevity.
What country doesn’t have a dept problem some are further down the road but most are just a few years to decades away
Europe needs to heavily invest in automation now
you love to see it
Europe in retrospect, has been in an era of economic stagnation for decades as gdp of major economies just experienced measly growth rate in the last decade or so. Out of all EU countries, Germany seems to have the most thriving and innovative economy. Indeed, statistics show that investment in science and technology relative to gdp is the highest amongst g7 countries. As for France, unless their productivity rate increases substantially, the c'est la vie miracle will be over.
The problem is the structure of the Euro.
Financial operations should be highly technical things that just exist to support governments investments in real stuff (education, infrastructure, etc...)
The Euro has elevated government deficits/debt into being a target, rather than a means to an end. That's the mistake.
You know that Germany is in a economic recesion I prefer having 40% of tax then to having to pay 0,70cents the kilowatt
Asia does not seem to be much better.
just look at China now
@@httm241 China is having a recession, but if you average the last 10 years they've still got a solid 5% growth rate per year.
Europe, on the other hand, is averaging barely above zero.
Japan is probably a better comparison, they have a similar average growth rate to Europe.
@@domtweed7323 China’s real estate sector is a massive time bomb
I live in France as an expat. The problem is excessive spending and inneficiency - in public sector there are too many workers, many of them are doing redundant tasks, the efficiency is abysmal, productivity is not even a word they undersand, and speaking about understanding - they still have an total allergy for english, and just freeze when someone from rest of the world comes for example for some business things. In work they still use fax machines, electronic healthcare/fiscal systems do not work. France deserves the mess they are in, hopefully this will serve as a shock therapy in order to help them to finally adapt to 21st century.
Ok, but merde aux Anglois tho.
I can vouch for this. This is very true.
On top of things, they are arrogant and egocentric.
don't open this pandoras box. The same was said for the Greek public sector and now it has snowballed into stripping away public health systems. It is a warning from the south. Don't villainize the public sector, you don't want banker neoliberals to take over. Shock therapy has NEVER worked
In the case how do you explain that France have one of the highest productivity per hour ?
@@alganis3339 Perhaps the private sector is efficient while public sector is not.
A recent report found that France's top 0.1% pay a reduced tax rate compared to the rest of the population, so that would be a good place to start.
where is germany in the tax to gdp ranking placed?
www.oecd.org/tax/revenue-statistics-germany.pdf
At least data from 2022
Gallia capta est. 😂
Even as a German I have to say the way he said "Hermés" at 10.50 is straight up criminal.
The majority of countries if are added private debt, territories debt and private debt have a debt higher than Italy.
Something which is quite hard to do, but maybe worth working on, is to avoid having ones presentation pattern being a sequence of sentence with the exact cadence.
The video is basically 15 sentences, most of them cut into two or three, where you always start and end at the same emphasis.
la la la la LA.
la la la la LA.
Hi,
Do you have any examples of people that do it better that you would suggest emulating?
Cheers,
Hugo
@@IntoEurope I mean I suppose most clear sounding producers. Anybody who doesn't treat each sentence as a standalone message and where the talking sounds a bit more natural. Adam Neely is the next video in my recommendation list right now. He's not bad I guess?
France needs to attract more entrepreneurs and to achieve this they need to be prepared to offer incentives especially for companies that will produce goods for exports.
I would also like to suggest that France is capable of producing far more food than many other countries and export more efficiently to the world. The production of organic foods is tremendous and yet we see countries such as The United Kingdom importing fruits and vegetables from South America and the Middle East. Being so close to the UK and it’s thirst for quality food there’s a phenomenal opportunity to negotiate the supplies with supermarkets and local food shops or even via Amazon etc. It’s time to move to France and start a business rather than just sit and watch the erosion of the economy and flee. Viva le France 🇫🇷
Now I want to find what research exists on the subject of what the Nordic government bureaucracies do well which the French government does poorly.
Because Nordic countries are actually very liberal to the creation of wealth, while France is the complete opposite. Taxes for companies are pretty low in Scandinavia.
@@diogorodrigues747They are more decentralised ,liberal and socialist. They have huge statistical datas where they like to keep abd use a lot for decades so it also ease things. They also do not have an energy crisis so their gdp didnt plummeted.
But I disagree on taxes for companies being low they are not much different from france. Almost all corporate income tax in nordic countries fixed in %22 while France has %25. Although %3 makes a lot of difference it isnt much higher but do not let this fool you Nordic countries has a brutal tax system that prevents rich from getting too rich and poor from getting poorer.Thus keeping the balance between majority and rich therefore a more liberal and low corruption governments
@@exosproudmamabear558 I know very well that taxation in Scandinavia is high, that's why I said "companies" and not regular citizens.
@@diogorodrigues747 Dont talk about things you dont know much about. We have some of the highest taxes company-taxes in the world.
@@diogorodrigues747 Taxation in Scandinia is not just high it's the highest in the EU with Denmark.
The obsesssion with austerity within some EU intellectual currents is silly, and government debt to GDP in France did go down in 2021, 2022 and 2023 anyway. French fertility rate is very high by EU (or e.g. East Asian) standards at 1.83, so population aging is not going to be too drastic of an effect. Surely it should try to improve, like all other places, but France will keep its capacity to give a good quality of life to the average person for the foreseeable future because it will keep its ability to produce and import the corresponding goods and services, and to have redistribution mechanisms that provide the average person a reasonable amount of access to those. And in terms of what legislative changes will result to a better life for the average person, a more ambitious social-democratic program through measures like the new global corporate tax and a possible extension to a global wealth tax seems like definitely a more promosing way to go than the Thatcherite path, which as we all can see has as its end game the scopegoating of minorities to cover for oligarchs' looting.
Well said. And brits are now so f...d! Since Thatcher they haven't reclaimed their water resources yet, this lunatic privatised even water. So today the river thames is owned by "investors" from Kuwait. No surprise there's so much shit floating there
I guess the CFA will be getting fresh coat of paint.
🤔🤫
How about the French audit the state. Get into the details on where the money is going instead of further putting the burden on the people because it'll keep going that way until the burden is so heavy the people remove it from their shoulders
"Macron has increased money given to businesses", "the governement is looking to reduce spending" => gee I WONDER what could have caused the so call 'problem'
And don't say giving to companies helps as 1- a government acts for its people, not its businesses, 2- our capitalist society dictactes that only the profitable companies keep up => one cannot argue against hand-outs to people if they argue for hand-outs to businesses
The solution is clear then, France must make PRODUCTIVE investments. The other question is whether France has the political will and authority to make them.
Italy never had the amountof debt France has. And variable rates mostly !
If I may for the retirement and pension system it's true it cost the state 14 billions but it was only for 1 year and if you look in the last decades it brought hundreds of billions to the state. Also the productivity truly increased so now we need less worker for every retirees and to finish retirees are spending their money and not keeping it so the state is gaining from it with the VAT (main taxe). You can look at the COR article and resumee to see all the numbers and studies about it (Conseil d'orientation des retraites).
The governement decided to augment subvention and to decrease entreprises taxes to augment foreign investissement (France being n°1 in the EU for the 5 last years if I'm not mistaken) so they had to cut spending somewhere else to be able to pay for that and the retirement fund/system is giving less money than before.
We need a European & American wealth tax treaty.
This mentality is why europe is behind.
What we need is to abolish the modern state and its addition of spending others people money. Abolish income tax and the welfare state and return to the 1900s funding model which indeed included some form of wealth and estate taxes.
That wouldn’t solve anything most rich people have money in the stock market, even if you got all their money it would not be enough.
time for germany to leave this debt union
Soon or later, the European Central Bank will have to use its powers to properly solve the issue of debt within the Eurozone. When the sum of public debts in the EU represent 90% of its GDP, it's not really a problem that can be solved by slightly reducing spendings or increasing yearly revenues
You didn't mention the Olympics spending
The creation of debt by all the G-7 Nations appears to be linked to the deterioration of their Colonial Empires.
Since it became economically more advantageous to join the BRICS Trade Union,
Nations appear to line up to trade with their Peers.
The European and US ability to sell Bonds and Treasury Notes to support their Nations,
seems to allow them to borrow from some other Nation.
The Economic ability to pay for the Borrowing since their Colonies have decided they are no longer forced to deliver their resources to the G-7 Nations, has diminished.
We apparently need to recognize that Colonial Exploitation is not an acceptable social system?
The UN has already condemned the practice.
The need to indicate that process as the problem that is creating the Debts,
should be discussed.
ok boomer
One of the main problems is probably the same as here in Germany - the social security system is viewed as a gift. Most people do not understand that they are the ones that are paying the bills and that it would be cheaper to do so directly than paying them plus the bureaucracy on top.
Most germans say that schools, medication, etc. is free in this country and that this is a great thing. But it is not. The average worker is paying for it with their taxes. The poor are still not going to university but paying for the expensive tax financed elite universities if the rich by their tax burden.
If you cut social government spending it is (often) actually a financial relief for most of the population, but it is viewed as a robbery by the government.
As those measures are unpopular no politician is willing to implement them.
But when it is private you also have to account that a proportion (at least 8%) will go into the pockets of the person providing the service. At least with the state it remains in the public coffers.
However, if you have an environment where you can have competition then these profits get reduced and prices as well. So it is about what type of service do you have. In switzerland or the US healthcare is terribly expensive, so privatizing it does not leave to better outcomes (faster service maybe but the difference in life expectancy is negligible).
Though I believe in social systems, the current ones are broken.
People don't understand how the average life expectancy is higher and what it means. Every extra year costs a lot of money and often it is not often living. And then children are not easy. To a certain extent, the west should consider motherhood as a well paid job. Make it more of a financial choice and less of financial deterrent
We've missed the opportunity to set up a wealth fund to pay for future retirees during the good Times.
Why not put laws up to vote that cut high cost low value things + adds a lower cost higher value thing.
People dont like to vote to lose something.
But if you give them something they value more in return, yet costs you less, then they can be happy with it.
I dont understand why I never hear anything about proposals that swap things out.
If you spend money in ways that cost alot of money yet give little value.
And there are alternatives that give more value yet cost less money.
(Aka if you could be doing things better.)
Its almost definitionally possible to join these as swaps.
I dont understand why people constantly vote to lose something. Or vote to gain something.
Instead of voting to lose something to gain something they like more.
socialists believe that they have the right to steal bernard arnault money. So they will never give up on their privileges.
French speciality: Tax, tax, tax ,tax and corruption
Strange how its always the welfare system but never the greed of the rich, the investors and aspirationals.
Those do play their role in that. Macron cut taxes for the rich and big business... But the results show a failure to create more growth
You can't squeeze blood from a stone, everyone can't live off the rich.
If you increase taxes on the rich, they just end up leaving and you end up with less tax revenue and less growth due to decreased investment.
If you confiscated the wealth of all American billionaires, it would be 3 trillion dollars. The US spent 6.3 trillion in 2023 alone.
@@Spido68_the_spectator Macron cut the ISF which is a tax on wealth that doesn't exist in most countries. I'm not totally against such tax but it should be an international agreement. The other tax he lowered is the capital gains tax, which was ultra high in France, and is still double that of the USA for example (30% vs 15%). After that the French state actually got more money from taxes so it's difficult to say he really lowered taxes, he just streamlined them.
As for growth we don't live in the parallel world where Macron would have stopped the supply side push, I happen to think that stopping would have been a disaster for the economy.
US debt is sky high but they can never default because they're the world currency
And the colonies are kicking the French out. Free resources are dwindling😊
Which resources France get from its former colonies (supposedly cheap or "free") and how important are these when exchanges between France and Africa only represent some % of the total ? 🙃
Return to your Putin fan club you didn't reach the right video to spit your BS.
@@Sandfish-zw6id, uranium way below market prices from ECOWAS countries.
@@Sandfish-zw6id What is total energy doing there?
@@Sandfish-zw6id Gas, oil, iron and salt from Tunisia JUST to get started. Total signed countless deals with our former president's in-laws that are protected by Tunisian politicians with French citizenship.
Don't even get me started on how France forbids Tunisia from building a big port in Bizerte (the northernmost point of Africa) or how it dictates which countries are allowed to invest in North Africa and which aren't.
Tax, tax, and see the economy crumble
💯
Decreasing productivity...what do you think is causing that?
terrorists.
Impressive French accent!
The guy is French.
@@diogorodrigues747 well then great English accent mdr(lol)
The downfall of France also means that downfall of Netherlands. Belgium and Luxembourg and Germany will fall in a huge crisis and every other country will lose their profits as well
My advice put some background music in your video's. You have alot of great video's and geven great information.
Well historically when debt got too large, wars began.
True
or revolution
Why do companies pay inheritance tax? Doesn't inheritance tax apply to individuals only?
Those who own the companies have to pay inheritance taxes. They then extracted dividends to pay back taxes thus canibalizing the companies.
Cheers,
Hugo
everything is peaches in the EU & France, they said on the TV we are going to war with nuclear power Russia 😂😂😂
Russia has even worse demographics
Frexit for the win