Emmanuel Macron removes his watch during interview
French President Emmanuel Macron is facing a new economic crisis that could “spill over” across the EU and affect eurozone economies, an expert warned. The French leader was told by Central Bank Governor Francois Villeroy de Galhau on Monday that to reduce inflation and ensure economic growth, his government must end the generous spending policy it adopted since the start of the coronavirus pandemic.
In a letter to the French President, Villeroy de Galhau wrote that a “social and economic disease” with the rise of inflation was now risking to spread to goods and services beyond food and energy.
He added: “Our yearly deficit is due to be one of the highest in the EU.”
French government debt stands at 111.6 percent of GDP, according to the Economy Ministry’s latest estimates published last week – way above the approximately 90 percent euro area average, and budget rules’ 60 percent debt ceiling.
The French leader is already under pressure for the negative response he has received over his pension reform, still causing violent protests across the country.
Speaking to Express.co.uk, Research Fellow at the Henry Jackson Society Dr Helena Ivanov warned Macron’s crises could easily “spill over” across the EU.
She said: “Emmanuel Macron is increasingly finding himself in a difficult situation. The protests about the pension reform are not calming down, and recently we have seen criticism of Mr Macron for state visit to China.
“This now becomes yet another problem for Mr Macron – and we are to see if he can find a way to resolve this, or if the discontent will reach boiling point.
“None of this is really good news for the eurozone or the EU.
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“Mr Macron is one of the most prominent EU leaders – and crisis in France could easily spill over across the EU.
“Now, more than ever, it is important for Mr Macron to find a way to address the problems he is currently faced with, and avoiding finding himself in new crises.”
Hundreds of people opposed to the new law raising the retirement age from 62 to 64 demonstrated last week in a small town in southern France during a visit by President Macron, while scattered protests were staged elsewhere.
Macron’s trip to Ganges comes amid a concerted new effort by him and his government to move on from the furor caused by the pension reform.
Demonstrators sang what has become the anthem of the retirement protests: “We are here, we are here, even if Macron doesn’t want (us to be here), we are here.”
The French president met with teachers and students at a middle school, where he promoted his education policies. At his arrival, the site was hit by a power cut, which the local branch of the hard-left CGT union said was a protest action.
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Dozens of police were deployed in the small town to prevent protesters from getting close to the school. They briefly used tear gas to disperse people who tried to storm the barriers.
Raising the retirement age ignited a months-long firestorm of protest. Opponents were further infuriated after Macron’s government in March chose to use a special constitutional power to pass the reform without a vote in parliament.
Later Thursday, Macron made a surprise stop in another small town in southern France, Perols, where he walked in the streets to meet with some residents in a relaxed atmosphere, shaking hands and doing selfies.
To a woman who told him she disagreed with the way he forced the pension changes through parliament, calling it undemocratic, he said, smiling: “I’m not going to resign.”
The woman replied: “You don’t care what people want.”
Macron has argued that raising the retirement age is needed to keep the French pension system afloat amid an aging population. Unions and other opponents say wealthy taxpayers or companies should pitch in more instead, and see the reform as an erosion of France’s social safety net.
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