Tag Archives: French sovereign debt

Le Monde discusses potential downgrading by Moody’s, and Big Brother police watch in Nice

24 Jan

France once again under the watch of financial markets


(link to original article in Le Monde)

Six days after the social-democratic ‘turning point’ of Francois Holland, the economic decisions announced by the chief of state are undergoing a first test by the markets. American ratings agency Moody’s will publish on Friday 24 january its assessment on France. And this is overhung by the threat of a new declassification for the actual rating class of the French state, AA1, is accompanied by a negative outlook. Moody’s had degraded the rating of France on 19 November 2012, asserting itself worried by the weakness of economic forecasts and their budgetary consequences.

On 21 december 2013, in a report on France, the American agency judged “improbable” in the short term the elevation of France’s rating, and indicated that its future action on the grading of the French national debt – the raising or lowering of the actual credit ranking – would be “in part based on the progress of the government on tackling fiscal pressure, and on the structural faults of the economy, which would together determine the probability of seeing France stabilise or reduce its debt ratio over the course of the following years.” These comments, to which you must add the decision of Standard & Poor’s to reduce by one notch its rating on France, altering it from AA+ to AA, left the belief that Moody’s would again degrade France.

The government has won itself time

But the wind could have turned. On the strict economic plan, the picture, if not yet bright pink, is improving. France has been out of recession since last spring, it should post a growth in its **Produit Interieur Brut (PIB) i.e. GNP of 0.9% this year, according to the predictions of the government and the IMF.

More than the economic environment, it is the change in political tone which could influence the financial environment. With the pact of responsibility announced by Francois Holland, which envisages the suppression of employers’ contributions of over 30 billion euros from this 2017, and of economies on public spending of 50 billion euros.

“These announcements come from the belief in what is expected from the ratings agencies” believes Jean-Louis Mourier, economist with Aurel BGC. “The government has gained some time,” sums up M. Mourier. According to him, Moody’s should therefore leave its rating unchanged. The negative outlook will remain, it is time to evaluate the concrete reality of the changes announced. And from this point of view, the budgetary derailing France was accused of in 2013 has weakened the force of Francois Hollande’s message.

Adding credibility to France’s words

According to the statistics released by the government on the 16 january, the state deficit has to increase, to enable the disposal, of 74.9 billion euros, perhaps 2.7 billion euros more than previously  at the time of the collective budget of December 2013. This gap derives essentially from the disappointing fiscal cash flow.

Anxious to maintain the credibility of France’s words, Pierre Moscovici indicated Thursday 23 january, that the aim of reducing the public deficit of France under the level of 3% of GNP in 2015 would not be abandoned as a result of the provisions of the pace of responsibility. The Ministry of the Economy and of the Finances has recalled the trajectory on which it has committed the government: 4.1% of the public deficit for 2013, 3.6% for 2014 and to be below 3% for 2015.

For the markets, a further eventual degrading of France’s debt should not provoke significant reactions. However, reiterates M. Mourier, in two days, in the wait for the decision by Moody’s, the gap between the German 10-year rate and the French rate has increased, in favour of the former which has lowered. This gap – the spread – has grown from 65 to 73 basis points.

In Nice, smile you’re being filmed


(link to original article in Le Monde)

Here, in the centre of urban supervision, Christian Estrosi is in his own realm. The policemen toss a military salute while they cruise in the corridors/lanes and give him an “understood, Mr Mayor” when he requests something. It is him who created, in 2010, this first complex of “videoprotection” in France.

A building entirely dedicated to observation, to the collection, processing and archiving of images issued from 915 surveillance cameras disseminated through the town. Seventy municipal policemen are involved. They dissect the images in search of something abnormal, responding to the calls of citizens who flag certain incidents or alert them to suspect behaviour, they are linked to the national police and the courts.

In the control room, opposite his own portrait which adorns the wall, M. Estrosi mounts, on a giant screen, some of the feats achieved by his teams thanks to the surveillance cameras. Like in a film about gangsters, we are suddenly now in pursuit of two little hoodlums on scooters. The image is in colour and high definition. The passenger is stealing a bag containing hundreds of thousands of euros from a van in the forest whose window is left open. The scooter flees at high speed through the streets of the town.

We follow them from street to street, from camera to camera, over eight kilometres, without ever losing their trail. Several minutes later, the thieves, believing themselves in the clear, leave the lane rapidly doing zigzags of joy on the road. At the end, three police cars wait to arrest them. Christian Estrosi is more than a little proud of his presentation. To think, “the police have a discovery rate of 36% thanks to the cameras. Seven hundred and twenty blatant crimes were revealed last year. Without the videoprotection, we would not have captured them.”

It’s more sexy than culture

The snag, it’s that, if you believe the statistics of the Ministry of the Interior, the statistics for crime in Nice are worse. As regards the issue of security, the town holds three records: that of the highest number of surveillance cameras in France (one for every 360 inhabitants), that of the greatest strength of municipal police (380, one for 902 inhabitants) and… that of the most disappointing results. According to the ranking published by the Express at the end of November 2013, Nice has moved from number 401 to 408 in regard to attacks on property, and in 389th place in regards to violence against individuals.

In 2008, to the delight of the mayor Jacques Peyrat, M. Estrosi built his campaign on the theme of security. “To become elected here, it’s more sexy than culture” recognised his former assistant, now become his adversary, Olivier Bettati. On these questions, the candidate Estrosi had valuable arguments; akin to Nicolas Sarkozy, who used to specialise in these questions at the UMP, he had, moreover, helped financed the construction of a commissariat in the west of the city for 27 million euros, by the general council that he headed. Cherry on the cake, he assisted in the services of a professional, Benoit Kandel, former colonel in the gendarmerie, who has a strong reputation for fighting against delinquancy.

Once elected mayor, M. Estrosi made security one of his priority tasks. Under his mandate, the number of surveillance cameras tripled at a cost of 14million euros, and those of the municipal police increased by 100 in three years (53 million euros in operations). The municipal police were equipped with tasers and divided up into different brigades (parks and gardens, VTT, canine, automotive, anti-tags…). The municipality simultaneously put in place a network of ‘vigilant neighbours’, 520 persons whose reputation was verified and who received training by the municipal police, to locate suspected deviants and alert law enforcement via SMS. A network of shopkeepers was also organised so that each among them had a direct line to the heart of the municipal police…

Municipal arrests, anti-bivouac, curfew

To complete his arsenal, the mayor also took all sorts of municipal arrests (against selling groceries at night, against consumption of alcohol in the street, aggressive anti-begging, against large gatherings, anti-bivouac, curfew) ostensibly to combat delinquency. And with little concern if these were ineffective, and regularly lambasted by the administrative tribunal, he attempted to make the population believe that he took their concerns to heart.

“It is part of a strategy of visibility,” analyses Laurent Mucchielli, director of the regional Observatory of delinquency and its social origins in the PACA region. “He is targeting a population which demands a major presence in public view and he is searching for how to respond. He is taking above all a political stance. All these deployments have not induced any change, any qualitative leap, this much is obvious.

For M. Kandel, who has managed the dossier for the mayor over more than four years, before being supplanted by M. Berrati, the poor statistics from Nice are inevitable: “Nice will always rank low, it’s structural. If you compare the number of crimes and offences to the number of inhabitants in the inventory of the Insee (Institut National de la Statistique et des Etudes Economiques), here it includes every year between five and six million tourists. You need to take into account the real population and the true statistics.” Tourists are in essence captive targets. Another factor which explains the mediocre results: the strong social inequality between the problem areas and the very wealthy residents.