Authored by Thomas Kolbe via American Thinker,
With massive state demand, Berlin and Paris hoped to escape the debt spiral. But economic data show that, in the end, not even statistical pseudo-growth remains. The pillars of the EU are crumbling amid structural failure.
Fateful weeks on the bond markets: The rise in French bond yields continues unabated. At the same time, German yields are falling - the first wave of capital flight within the eurozone has begun. Investors are steering toward the supposedly safe harbor of Germany.
France's immense budget problem, the chaos on its streets, its fundamentally misguided economic policy, and the astonishing reform incapacity of the French classe politique are sinking ever deeper into the consciousness of the markets.
The femme fatale of the eurozone's debt club is threatening the tectonics of the entire EU in these recent weeks. For now, Germany remains firmly embedded as the credit anchor of the common capital market, but France's shockwaves bode ill: If the trend in French bonds does not reverse very soon, the ECB's fire brigade will probably be called in to extinguish the blaze.
This is an important lesson for all those who still believe that government debt can solve social problems - or even generate prosperity: State consumption crowds out the private economy. France has made this dish its recurring daily menu.
France's statism is legendary. With government spending at 57.2 percent of GDP and a tax-and-levy burden of 43.6 percent, the country has succumbed to the illusion
