The fresh macroeconomic data for Q2 2020 acknowledges that France is one of the worst-hit economies in the EU. Before the COVID-19 outbreak, the French economy had been badly hurt by protests arranged by the Yellow Jackets movement since the end of 2019. So, it comes as no surprise that France’s economy tumbled the record 13.8% in Q2 2020. Interestingly, the contraction is bigger than an average figure for the eurozone’s countries and even deeper than in Italy whose economy has been rated the worst over the recent years. Analysts reckon that France’s economy will be back on the rails not until the early 2022.
A string of tough challenges overshadows Emmanuel Macron’s presidency. So, the leader of the 5th republic has brought up the thorny question about the EU membership. His philosophical reasoning led him to the conclusion that the French nationals could have cemented the idea of leaving the Union. If the referendum were held under the current conditions, the majority would vote for the “divorce”. From Macron’s viewpoint, the EU is to blame for the dismal state of affairs in the republic. He shifts responsibility away both from himself as a state leader and from local authorities. With the EU skeptic sentiment, France is the number 1 candidate for the withdrawal. Indeed, its economy is self-sufficient and capable of developing hi-tech industries. Outside the EU, this advanced economy will be able to ensure the decent living standard of the population dropping huge EU membership fees and other financial commitments. Someone may doubt such likelihood. Still, Macron’s presidency is at stake. Amid the resurgence of the coronavirus pandemic, he will have to prove his efficient governance. In case he fails this challenge, he will urgently need some enemies. So, it would be a good idea to say that a heavy burden of EU commitments account for the doom and gloom in the domestic economy.
The Commitment of Traders Reports indicate enormous open interest for the euro. At first glance, the euro maintains the strong bullish momentum. Nevertheless, it does not make sense to follow blindly the advice on selling the US dollar against the euro. The Black Swan may disrupt your reckoning and erode your savings. Who knows? Perhaps, the French are serious about the exit from the EU.
