France loses its way


French voters have delivered a dramatic rebuke to establishment political parties.

Now, in a runoff vote set for May 7, they will choose between a 39-year-old political novice, Emmanuel Macron, and hard-right candidate Marine Le Pen of the Front National.

Whoever wins will inherit a drifting economy that’s failed to deliver prosperity to the middle class.

 

investing-France

 

 

 

Triple-Whammy

Europe’s third biggest economy is burdened by sputtering growth, high joblessness and budget deficits.

The IMF predicts growth of just 1.4% for France in 2017, one of the weakest rates in the EU.

 

France-investing

Source: CNN.com

 

Voter Rage

Nor is it difficult to understand why French voters have rejected establishment politicians.

They simply haven’t delivered job growth.

French youth unemployment, the highest in the EU, is nearly 25%.

 

France Jobs

 

Debt Burden

Finally, France doesn’t have the option of using a big fiscal stimulus package to deliver an adrenaline shot to the economy.

Its debt burden as a percentage of GDP is also world class.

 

Source: CNN.com

Source: CNN.com

 

 

Takeaway

Stagnant jobs and income growth are a big part of the populist wave that has swept across the world.

In my opinion, middle class voters feel left behind and are looking for unconventional leaders to shake things up.

 
Photo Credit: Moyan Brenn via Flickr Creative Commons

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Xavier Brenner
Xavier Brenner
Xavier Brenner has covered global market, business and economic trends for Interactive Brokers Asset Management since 2013. An experienced financial journalist, Brenner offers analysis and insights on the stories that matter to the discerning investor.