France: the next debt domino to fall?

France's worsening outlook has left investors in doubt over President Hollande's ability to reform the economy.

Ahead looms a problem that could dwarf any of the eurozone's current struggles, says The Economist: France. It could be the next debt domino to fall.

Its debt pile has reached 90% of GDP, and it hasn't balanced the budget since 1981. The economy is set to tip into recession and the odds of France growing fast in future, thus reducing debt rapidly, are worsening. It is over-regulated and uncompetitive, with Europe's highest social charges on payrolls, very high taxes and rigid labour and product markets. All this has hit investment and enterprise. No wonder ratings agency Moody's has removed France's triple-A credit rating.

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