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The Next Debt Crisis Could Come from Paris

BusinessWeek Original article ›

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France lags behind Germany and other countries in competitiveness. France's share of European exports decreased from 15.6% in 2000 to 12.5% in the first 5 months of 2011, according to Coe-Rexecode, an economics consultancy firm. Germany has used the last decade to lower social spending and state spending, bring wage restraint, and making industry more productive. France has not experienced a similiar process. Competitiveness and growth is needed for France to improve public finances. After the rise in borrowing costs to Italy France's premium over Germany to borrow for 10 years went up to 71 basis points on July 13, it is now at 62 points. France's trade deficit is rising and was 7 billion euros in April and May, according to Societe Generale.

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