French yields at 2002 highs and a Bundesbanker just called it a clear warning sign

The French people won't accept any decrease in their benefits. So then the government will need to borrow more. At some point there will be a default. Then there will be protests and riots as benefits are eliminated. And then eventually people get used to being poor.

It’s true, i’m french and most of my fellow french people citizen wont accept any decrease, especially the older one. They would rather see the boat sink thanks to their generous pensions than do any effort to prevent this, i think we are really fucked

There will probably also be an increase in racist rhetoric like blame Muslims or Chinese or Germans. Maybe a rise in anti-EU sentiment. Bring back the franc! Lol

Germans? Lol :D Which century do they live in?

Every so often, you see racist nonsense from centuries ago being revived. Even here in America, you'll occasionally catch some far right dipshit declaring that Italians and Greeks aren't "real" whites.

Of course we will blame anyone but ourselves, this is why we won’t elect anyone with a plan to escape the bond crisis we are facing. Yet i would like to say than blaming Germans is not a stupid thing to do when it comes to french economy, for many years they did everything they could to keep France from having a strong industry, as they want to stay ahead of anyone else in the euro zone

Well, the obvious plan is to raise taxes and reduce benefits. It's hard to get voters to vote for a candidate proposing that. German economy is having a hard time too with the lack of Russian energy and influx of Chinese competition. France can compete in some sectors like finance, insurance, energy, luxury goods. But it struggles to compete with China as well. But do the Chinese ever love French fashion and food.

Well certainly Renault and Citroen did their demise on themselves, not BMW or VW.

That’s a gerontocracy

We have it in the US too. Social Security is the third rail of politics, plus all our politicians are fucking 80 years old and refuse to retire.

We have a gerontocracy indeed, but Social Security (which isn't particularly generous, especially to the poor) and social benefits aren't a reflection of this. The fact that political leaders are octogenarians and our tax laws support wealth hoarding are bigger signs of it.

Don’t forget the absurd amounts of money we spend on the military  

Just out of interest, what's the Social Security payment amount when folks reach retirement age, assuming they worked from say mid 20s and paid their premiums? Here in NL its \~ 1700 before taxes.

Dumb question but why don't other countries in the West (including the US) face the same problem as France? Is it just because they are richer? Are pensions even the main cause of this crisis? From what I read they only account for a few percent of the deficit.

Other countries also face the same problem. But French social benefits are especially generous. I've heard that french people don't even know what dental flossing is, because they go to the dentist for free, so then they don't need to even floss their teeth to maintain their dental hygiene. That was mind boggling to me. In the countries I've lived in, we all learned to floss our teeth because it was much cheaper than seeing a dentist. And also in France, doctors still make house calls. Like doctors actually go visit patients at home to care for them. I have only read about that in stories, or watched that in historical movies, and have never experienced that in any country I've lived in.

Many layers of wasteful spending, relatively high unemployment and low pension age (from a French) UK and Germany are having problems too but less so

Spiking bond yields are a phenomenon that's happening across the Western world right now.

Are pensions even the main cause of this crisis

100% they're the main cause. "Mandatory Spending" is 60% of the US federal budget, ~$4.2 Trillion, primarily funding Social Security ($1.6 trillion), Medicare ($988 billion), and Medicaid ($668 billion). The boomers are retiring in droves, which means the raw number of beneficiaries drawing from the system is increasing, while per-capita healthcare costs consistently outpace general economic inflation. Social security, medicare, and medicaid aren't means tested hardly at all in the US. When I worked with my CPA and lawyer to do my estate planning, they literally created a legal entity so that when I retire, it would essentially look like I was destitute to the government. This means that even though I'm wealthy by pretty much any Western standard, I can still get these benefits (if they're still around when I retire, which likely they won't be). Boomers are immensely wealthy, retiring with all time highs in asset prices, of which they control the vast majority of. When someone retires, they don't work and only consume, which is an inflationary pressure. Boomers are mortgaging their kid's and grandkid's lives because they want to continue to live high off the hog. The spike in bond yields, and central banks hiking rates to tame them, are a direct correlation to the greediest, most self-centered generation in modern history deciding they don't give a fuck about the rest of us.

Fuck no! Pensions are not the main cause. Not even close. That statement show some crazy kind of personal bias. Main issues for this are much larger than that. Proof is that this is happening in Japan, US, Canada, UK, France, Germany, etc. Big issues causing this: government debt issuance and lack of fiscal constraint, competition between government and private sector (governments are issuing bonds and so are major hyperscalers doing AI buildout - people fight for the best return), and energy shock and inflation. This is a classic fight over more scarce and less available capital measured against greater uncertainty. This has fuck all to do with pensions. Pension funds are already invested in the markets and will not impact yield rates like you would seem to imply

Like the idiots in Massachusetts who vote Marky back in. He's going to be 90 years old in his next election.

I paid for my social security thank you very much. I’d have been happy to keep it myself, but if I paid in, you need to pay me back or fuck right off.

That's not how entitlements work, you paid for your parents and grandparents. Now us Millenials are paying for you.

Have they thought about taxing the rich Hollande style?

They thought about it. But Macron is also a member of the rich class, so that didn't work out.

What are Le Penn’s economic, tax and spending policies? The news coverage of her in the US is about fascism and immigration. Is she going to win the next election?

My (French, obviously) father in law thinks it’s outrageous to up the pension age at all or cut the amount He also thinks the state should support the 4 out of his 6 adult children who do literally fuck all (I’m married to one of the two that does something obviously mdr) Just refuses to accept reality, it doesn’t matter what people think ‘should’ happen if there is no money

Boy it's almost like outlawing and confiscating the hoarded wealth of billionaires is the only way out for the economy, after they have ruthlessly siphoned off every last dollar.

Before that they will increase their extortion of african countries, probably some military occupation, stealing resources etc. Just usual french stuff.

We are literally rioting BECAUSE the pensions are not being revised. The government is literally beating the youth in the street right now because they are being elected by the retired. It's the older bourgeoisie defending its rule over the entire system

And before there were riots with the pension system reform attempt. People don't want any change. Literally the two main opposing political parties are campaigning on the path of making the pension earlier and higher...

There were riots because the reform was unfair. It just made everyone work longer, indiscriminately. Someone who works at night, on roadwork, since they are 16 would have to work longer just as much as someone who's already rich and doing office work. There is plenty of money in France. But it's always the same ruling class siphoning it.

Nobody is rioting because of pensions right now. They riot because they want more money in education, not less for the boomers. Big difference

If you want more money somewhere you have to take from somewhere else. Money is not magically created. The current movement can be symbolically summed up to "future generations being neglected for decades for the profit of aging voter base which guarantees wins at elections"

At some point there will be a default.

I dunno. It's better for everyone to just keep taking more loans. I mean, look at USA. It's worked for them for ages now.

Late stage social democracy

turns out people like Free stuff and dont like it when you take them away

Is this any different than what’s going on in the US? We have a debt that exceeds our GDP and bond yields going up and no one will ever seriously consider touching social security or Medicare.

The US has lots of room to increase taxes we just don't have the political will to do it. France has some of the highest tax rates in Europe, increasing it would damage economic growth and risk making things worse.

US is the reserve currency

Don't try to explain that to reddit. You'll be shouting into the wind.

For now

It's similar, but US has control of its own currency, so it'll most likely resort to the easiest (for gov/politicians) option of inflation.

Because the US is monetarily sovereign, has more than double the nominal growth rate, has far more fiscal space to stabilize the debt relative to economic output, and 75% of the debt is owned to domestic creditors compared to only 40% in France. The often-cited figure for US debt is $40T, but $8T of that is owed by the Treasury to other government agencies & trust funds (a net zero) and another $4.5T to the Fed.

US has much better growth rates. You can grow out of debt but hard to do at 0.X%

Faut arrêtez de taper sur les retraités ils ont travaillé et c’est très bien il a la retraite à 10 ooo parfait il a bosse pour

Oui tu as raison il faut arrêter de taper sur une des causes principales du problème et continuer à aller droit dans le mur pour les générations qui arrivent, la solidarité intergénérationnelle c’est à sens unique apparemment. Notre système de retraite actuel a été créé à une époque où il y avait 4 actifs pour 1 retraité, de nos jours on est à 1.7 actif pour 1 retraité, c’est intenable mathématiquement. Enfin pour finir on est dans un pays où le niveau de vie moyen des retraités est supérieur à celui des actifs, est ce que tu trouves cela normal ?

Pourquoi pas par capitalisation là je suis d accord pas grand monde va être d accord

I would not invest in France.

Listening to Paul Krugman is a problem.

Yep he has historically been atrocious at predicting anything.

Ben il faut faire dans ces cas là la retraite par capitalisation et malheureusement ce qui pourront pas la faire ils auront le minimum c’est do mais ont va arriver comme aux usa

Worth remembering that the ECB's Transmission Protection Instrument is explicitly conditional on fiscal compliance, so it can't easily backstop France while Paris is still in an excessive deficit procedure without undermining its own credibility. That's exactly why the establishment is leaning on French politicians first: the ECB would rather let the spread to Bunds widen and force a budget compromise than be seen bailing out a core member. The tell to watch is the OAT-Bund spread versus Italian BTPs; if France keeps trading near or above Italy, the market is pricing political risk, not solvency, and that's usually fixable faster than it looks.

Maybe they should have consider this before going so gung ho on a war with Russia that is now costing innumerable lives and money. Not to defend Putin, but realistically the war was avoidable with some wisdom from the West in placating Russian security concerns.

This is probably the worst take in the entire thread.

What concerns, the Germans taking Kalingrad back and renaming it Koningsburg again, making it their new capital? The Russian security concern narrative is leftish dead cow story and cant explain Russian taking the Crimea in 2014. Russian imperialism is not coming from insecurity. The Mongols left Moscow 600 years ago. They stopped France under Napoleom and the Germans in WW2. They have nobody to fear.

French here, we're heading straight for a wall and we're going to drag the rest of Europe down with us