"There are plenty of tough jobs in politics but none tougher than the one just handed to Sebastien Lecornu, the third French prime minister to be appointed by Emmanuel Macron in a year. Lecornu has been given the nigh-on impossible task of getting an austerity budget through parliament at the head of a minority government facing implacable opposition from parties of the hard right and hard left."
"The reason France and Britain have no choice but to do this is because states are weak and markets are all powerful. The bond markets exert their power through their role in buying and selling government bonds. If they sell en masse, the interest rates governments pay to borrow goes up and they can be forced to change policy even when they are reluctant to do so."
Sebastien Lecornu has become France's third prime minister in a year and must secure an austerity budget through parliament leading a minority government opposed by hard-right and hard-left parties. France's failure to reduce its budget deficit leaves it vulnerable to financial markets and bond traders who can drive up borrowing costs by selling government bonds. Market pressure has produced the received wisdom that governments must comply with bond traders to avoid being crushed by global finance. Recommended measures include raising taxes, cutting welfare, and reducing spending programmes. Britain is noted as potentially more resilient because of its own currency and central bank.
Read at www.theguardian.com
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