Trump's France visit comes amid tariff threats and a country in economic turmoil

Published On Dec 8, 2024, 9:22 AM

The political situation in France is tumultuous following the resignation of Prime Minister Michel Barnier within 90 days of taking office. His proposed budget, aimed at addressing France's significant debt (currently at 111% of GDP), was met with a parliamentary vote of no confidence due to deep political divisions. Investors are concerned about economic instability, uncertainty in fiscal policy, and the potential for tax increases, with growth expected to remain sluggish above 1% this year. This uncertainty may further affect business planning and hiring. Currency analysts anticipate a depreciation of the euro against the dollar due to these factors and broader European weaknesses compared to the U.S. and China.