Regardless of the political issues at hand, when governments move they need funds or as we call it, cash. Take the French anti-government protests that lasted about 4 weeks. The middle class and retired French citizens were on the streets burning cars and blocking roads – the French have taken these tactics the higher levels of art – to protest the unfair treatment of both young and old. These protests are now putting the French government in a situation in which, much like Italy, money must be spent to support the middle class as opposed to other policies that are increasingly unpopular.
In short, the French government is spending money to make everybody in France happy, but we at Classiarius see a deficit explosion in the coming years that would place the local elected government on a collision course with Brussels. The European Commission will likely be forced to deal with France like it deals with Poland and Hungry and possibly Italy. These two entities will be at odds and the result will be added pressure on the European Union and the grand social project that it promises.
The four-weeks of civil unrest and anti-government protests forced Mr Macron to start spending money, promising 100 Euros a month for workers with no added taxes to this so-called overtime pay. Also, some taxes on older French will not be implemented. Companies have been encouraged to pay a tax-free end-of-year bonus to their workers.
Our major concern here at Classiarius is fear of an economic slowdown that will throw France and the EU into a tailspin. These new welfare programs in France will weigh heavy on the entire system.