Here's the head of the Bank of France and European Central Bank policymaker Christian Noyer, bleating about the rumoured imminent ratings downgrade for France: "The downgrade does not appear to me to be justified when considering economic fundamentals. Otherwise, they should start by downgrading Britain which has more deficits, as much debt, more inflation, less growth than us and where credit is slumping."
These people just don't get it. M. Noyer, even a layman like me can see that you have ignored the most fundamental of economic fundamentals.
Britain's economy may have the defects you describe; but its government has shown a willingness to get its spending under control. Has France? No. It has merely put up a couple of taxes.
Britain has its own central bank, its own currency, and can set its own interest rate. Rates here have been at 0.5% for years. ECB rates are way above this, and the Bank (for which you work M Noyer) actually put rates up after the crisis broke.
Because Britain has its own central bank, it can print money when it likes. Can France? No. France is stuffed because it signed up to monetary union.
France would love to have Britain's control over its own currency and start the printing presses rolling; in fact its President has been trying unsuccessfully to bring that about for months. It can't because its larger, more powerful and harder working neighbour, Germany, won't allow it to.
Now do you understand why Britain is borrowing at just over 2% and France is threatened with losing its AAA rating?
Someone once complained that this blog seemed quite angry quite a lot of the time. If that's so, it's a deplorable fault. But no apologies for the above.
