Japan monitoring European reaction to Hollande win

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  • 3

    just-a-bigguy

    Hollande won! The European union is at the end game!

  • 0

    Tuntematon Sotilas

    Definitely a horrible thing for France and the West in the whole. I doubt it will affect Japan economically but this worries me.

  • -17

    Hôjô Sôun

    The election of a socialist after the end of the Cold War is indeed a worrisome development. The French conservatives are clearly failing to exhort their populace to vote responsibly. This reminds me of the Palestinians electing Hamas.

  • 0

    AiserX

    Same guy that wants to tax anyone making over 1 million Euro's by 75%. Expect massive capital flight out of France if this guy goes through with his outrageous Economic views. Of course this might be good for some of us depending on where the capital flees to.. but bad for France overall.

  • 2

    some14some

    "Japan Monitoring European...." also monitor Tokyo Stock Exchange and Yen movement please !

  • 0

    Zen student

    This reminds me of the Palestinians electing Hamas.

    Hardly a fair comparison Hojo Soun. Hamas is a recognized terrorist organization which has its roots in the Egyptian Muslim Brotherhood. Monsieur Hollande is the leader of the French PS (Parti Socialiste).

  • 0

    Foxie

    AiserX - The long queues at the Swiss banks will become endless.

  • 2

    some14some

    i think this is the change that Occupy Wall Street is looking for all over the globe (?)

  • 10

    Tyger

    Wonderful news for France and wonderful news for Europe. Nothing outrageous about taxing the rich. They caused the economic crisis. As far as I am aware, when it all went belly up in 2009 there wasn't a socialist in power in France, UK, America or Germany. They were all right-of-centre governments. Socialists weren't running Lehman brothers. It is absolutely hilarious and beyond comprehension that anyone could possibly believe that the answer to the failure of unbridled apitalism is more unbridled capitalism. Also isn't it funny that all these capitalists go running cap in hand to the state when they make a mess of things for a bail out. Hypocrites! Equating the election of a pretty middle-of-the-road social democrat with the election of Hamas is ridiculous. It's called democracy we can vote for whoever we like! If the rich create so much wealth (the so-called wealth creators who are going to flee to Belgium or Switzerland), then where is it? Where is all this wealth? Certainly not 'trickling down' to the general populace. Congratulations, France! Glad you got rid of that racist fool Sarkoscy.

  • -4

    amida

    France will be the next Greece. It's confirmed now.

  • -4

    davestrousers

    Nothing outrageous about taxing the rich

    Except that the rich will just leave and take their enterprise, money and business elsewhere. Its a bit like watching a country dig its own grave.

  • 0

    billyshears

    Except that the rich will just leave and take their enterprise, money and business elsewhere

    Just like that they are going to leave behind a thriving business and take it "elsewhere"? I think you've fallen for that simplistic conservative rhetoric. For example, if you had a chain of successful shops in France, are you going to close them all down and leave because you have to pay more tax? And how easy do you think it is to start a whole new business in another country?

  • 0

    WilliB

    It is full throttle borrow-and-spend for France now, and this can only last as long as Germany pays. It is one for Germany to prop up Greece, but quite another to prop up France. Even Germany can not do that for long.

    The election of this Obama-type spending will mean that FINALLY the Euro scheme comes crashing down. Either when Merkel finally grows balls and stops the bail-outs, or when Germany is bankrupt... whatever comes first.

    It will be painful, but whatever it takes to end the idiotic Euro scheme is good. Better late than never.

  • -6

    tmarie

    Guess I should make popcorn and watch Europe go to hell in a hand-basket.

    **Nothing outrageous about taxing the rich. They caused the economic crisis. **

    No, there isn't at a fair rate. The tax rate he's proposing means more people will hide their wealth elsewhere. I also think you're being a bit silly in the blame game. Greed was the reason. If you think socialists aren't greedy... Where do all that money come from for all those people they need to support? Who were the idiots that looked the other way as long as they thought they too would benefit from schemes? Buying homes they couldn't offered? Piling up their debt? Come on now. You can spread that blame around.

  • 5

    Farmboy

    As long as there is no disruption in the wine and cheese supply.

  • 1

    Johannes Weber

    Hollande will soften up to the realities of economy. Every politician's promises do not hold past the first clash with reality. After all, the president is just the packaging of the country and normally completely unrelated to the country's contents. Even though this will probably be a violent clash of fact and fiction, when you remember the French protest and strike culture. However, Hollande will have a hard time to underperform in direct comparison to Sarkozy.

  • -1

    GW

    I think we are going to see in the not so far future that more & more countries world wide are going to make it harder for the rich to hide their money etc.

    After all there is only so much the world can take & it wont stop with individuals but also start applying to companies as well, the days of big biz & the wealthy being able to play off different countries I think will start coming to an end.

    The new game will be, "If you wanna do biz here, you will have to pay taxes here as well" More countries will start doing this, watch you heard it here first!

  • -4

    WilliB

    GW:

    More taxation does not stop the irresponsible spending by governments, which is root cause of the economic distortions we are looking at. The more the Hollandes and Obamas out there tax, borrow, and spend, the bigger the eventual collapse will be.

  • 0

    garomakaikishi

    what is japan going to do? print more yen?

  • 2

    Lizz

    Obama is campaigning on the idea is to make sure that top-earning Americans like Warren Buffett pay at least a "middle class" 30 percent federal tax rate which frighteningly enough for both countries puts him much closer to Sarcozy than Hollande.

  • 0

    Herve Nmn L'Eisa

    . As Maggie Thatcher said,"The trouble with socialism is that eventually, you run out of other people's money."

    At this point, France is already pretty much broke. Hollande will be the "fall guy".

  • -5

    okimike67

    Begining of the end!!! And if Obama makes it back in with his similar approch, Tax and Spend, afraid there will no NO BAILOUT!

  • -3

    WilliB

    garomakaishi:

    " what is japan going to do? print more yen? "

    Well, if Japan is sensible it will stop trying to prop up the collapsing Euro scheme by buying Euros and lending money to the ESM. But that would take a long-term outlook, and politicians are always firmly stuck in the short term.

  • 1

    WilliB

    Okimike67:

    " Begining of the end!!! And if Obama makes it back in with his similar approch, Tax and Spend, afraid there will no NO BAILOUT! "

    Yes, but at least the US has its own currency, and is not saddled with the structural problem of the Euro. The result of the US government exceess will be a double-digit inflation and a much weaker dollar, but the economy and the currency will remain.

    The structural morass Europe has created for itself with the unelelected dictatorship in Brussels, the Euro scheme, totally politicized ECB and the coming illegal ESM is open-ended and disastrous. The US problems are tiny in comparison, even if the numerical debt is (for the time being) bigger.

  • 1

    tmarie

    I think we are going to see in the not so far future that more & more countries world wide are going to make it harder for the rich to hide their money etc.

    Thing is, by doing this, we, as immigrants, sort of get screwed. trying to send money home? Ouch. Try and have an account home? Nope. As it is already, Japan keeps track off where we send our money and Canadian and Aussie banks are reporting what we have and own to the J government. The Americans get screwed with double tax... We're the ones that are going to pay the price, not the rich guys who can still hire lawyers and tax accountants to get them off paying more.

    Herve, well said. Where is this guy going to get all this money he seems to think France has??

  • 2

    Serrano

    Maybe in the next French election the conservatives will nominate someone who doesn't piss off so many people as Sarkozy did.

  • -8

    Michael Craig

    Congratulations, France! Glad you got rid of that racist fool Sarkoscy.

    How is Sarozy racist? He's Jewish.

  • 2

    AiserX

    Wonderful news for France and wonderful news for Europe. Nothing outrageous about taxing the rich. They caused the economic crisis. As far as I am aware, when it all went belly up in 2009 there wasn't a socialist in power in France, UK, America or Germany. They were all right-of-centre governments. Socialists weren't running Lehman brothers.

    Everything in this post is wrong. Under the Capitalist models there are winners and losers and your responsible for your own actions. Under the socialist models, losses are socialized through bail-outs and stimulus's giving the impression that there are no losers when in fact everyone just lost. Also I suppose you also want to victimize rich people whom had nothing to do at all with all these crisis? That would be like guilt by association of being rich.

    Just like that they are going to leave behind a thriving business and take it "elsewhere"? I think you've fallen for that simplistic conservative rhetoric. For example, if you had a chain of successful shops in France, are you going to close them all down and leave because you have to pay more tax? And how easy do you think it is to start a whole new business in another country?

    Do* YOU* know how hard it is to start a business in France and how easy it is elsewhere? In fact, it can take up to 9 Months, 2 years even up to 10 years just to get a small business started in France. Meanwhile it can take up to 1day to 1 week in the state of Delaware and just hours in Hong Kong.

  • 0

    jaybeeb

    And how easy do you think it is to start a whole new business in another country?

    It's not really about starting a whole new business. It's relocating; offices, jobs, capital... Obviously some enterprises are more easily relocated. New investment will hurt, who sink capital in a new business if the tax rates are so high?

  • -1

    kchoze

    This is a great thing for Europe and the world. Though there will be risks of changing course and of German reaction to attempts at it, these risks are nothing compared to the damages the present course towards austerity are causing and will cause in the future.

    Already unemployment in Spain, Greece and Ireland is sky-high and not falling. The poor state of those economies mean that they have become LESS likely to be able to repay their debts than if they hadn't cut spending and raised taxes (ie, austerity). With the German plan for Europe, this would have spread to ever more countries, and brought back the Great Depression in Europe.

    Though it's a bit early, I also note that the markets seem to believe that Hollande's election is good for the ability of France to afford its debt, the interests on France's 10-year bond has not jumped, but fallen a bit, more than Germany's bonds. If they were expecting an irresponsible government that would weaken France's fiscal position, they would be trying to get rid of these bonds, not trying to buy them, which would result in interest rates increasing significantly.

  • 2

    kchoze

    WilliB

    Well, if Japan is sensible it will stop trying to prop up the collapsing Euro scheme by buying Euros and lending money to the ESM. But that would take a long-term outlook, and politicians are always firmly stuck in the short term.

    Shows how little you know economics.

    The European Union is a very big client of the Japanese economy. It is one of the few partners they have with which they have a trade surplus, sending tens of billions more to them than they import. It is important for Japanese manufacturing that they keep being able to export to Europe, and for that, they need a strong Euro. If the Euro falls in value, European countries will find Japanese products too expensive and stop importing from Japan. They will either turn even more to China, or towards local production of goods.

    Japan has an interest in propping up the Euro.

  • -1

    WilliB

    kchoze:

    " Japan has an interest in propping up the Euro. "

    Of course it does. But by bank intervention it can only do that for a very short time. It is a wasted effort. This is the short-term thinking that I was referring to. Please read a message before commenting on it.

  • -1

    WilliB

    kchoze:

    " Though it's a bit early, I also note that the markets seem to believe that Hollande's election is good for the ability of France to afford its debt "

    ...and in what way would that be? He wants to borrow and spend even more, but government borrowing and spending does not solve a debt oroblem, it only pushes it down the road. And Germany can only bail out the lender banks for so long. Eventually, that will come to an end too.

    Obama-type "stimulus" spending is bad enough in the US, but if fostered on a distorted system like the Eurozone, it is truly disastrrous.

  • 1

    davestrousers

    Just like that they are going to leave behind a thriving business and take it "elsewhere"?

    If its more profitable to do so, and all other things being equal, some will, yes. Not everyone, but some.

    I think you've fallen for that simplistic conservative rhetoric. For example, if you had a chain of successful shops in France, are you going to close them all down and leave because you have to pay more tax?

    No, of course not, what a stupid question. Again, all other things being equal, I would sell the shops and invest "elsewhere", or try to move the profits in some way so they couldn't be taxed at such a high rate. Fundamental thing is that I would invest and work where it is most profitable.

    And how easy do you think it is to start a whole new business in another country?

    Don't know, never done it, and to be honest even if I did it would be irrelevant. Fact is there is good evidence to show that abnormally high taxes (e.g. 75% maximum proposed) lead to a loss of talent and investment. The 1970's brain drain in the UK is one example of this.

  • 0

    kchoze

    WilliB

    ...and in what way would that be? He wants to borrow and spend even more, but government borrowing and spending does not solve a debt oroblem, it only pushes it down the road. And Germany can only bail out the lender banks for so long. Eventually, that will come to an end too.

    For the moment, more spending is what the economy needs. As consumers and private companies' willingness or ability to increase spending are lacking, and the credit market is constrained for private borrowers, the only place where help can come from is the governments. The eurozone is a mess, as the individual countries have lost the ability to control their currency, which makes them vulnerable to runs on their debts, but France can still borrow at reasonable interest levels, and Germany borrows at near-nil rates (like the UK, which has more debt problems than Spain... but it has its own currency, proving how essential monetary control is).

    One thing is for sure, austerity, right now, is counter-productive. To reduce the deficit by 1 euro, countries have to cut 2-3 euros, because their economies are so weak that cutting spending slows the economy down further and therefore reduces the government revenues and increases mandatory spending (like unemployment insurance, needed if you don't want people to starve to death). For example, from 2010 to 2011, Greece has reduced spending by around 6,4 billion euros and it has increased taxes so that government revenues are 40,9% of GDP instead of 39,7%, the GDP of 2010 was around 227 billions, so you'd expect this increase to be around 2,7 billions more.

    So 6,4 billions in spending cuts and 2,7 billions in tax increases, that would mean the deficit would fall by 9,1 billions, right? WRONG. It did fall, but by less than 4 billions. The deficit was 23,5 billions in 2010, it has been lowered to 19,6 billions in 2011. (source: Eurostat)

    Note that these estimates I made likely underestimated the size of spending cuts as the faltering economy likely increased spending in mandatory last resort social programs. That means that austerity is even less efficient at reducing the deficit than it seems.

    The economy has been so thoroughly wasted by this austerity that it is quite likely that a large part of the economic losses have become permanent. Meaning that there will be no recovery, Greece will grow, when it eventually does, from a lower level than it had before the crisis. That is what is called an "L shape" recovery. The GDP trend will permanently be lowered, which will mean that the debt burden (debt/GDP) will be higher than it would be otherwise, and that's what matters.

    To tackle the debt problem, the economy must grow. With austerity, the economy won't, making the debt problem worse. With Hollande pushing for a "growth pact" and stimulative policies, this may rescue the european economy, and thus make the debt burden in the long term lighter, even if it means higher deficits in the short-term.

    The time for austerity will come... when the economy will be in its "boom" period, with an expanding private sector that will be able to fill in the holes left by reduced public spending.

    Of course it does. But by bank intervention it can only do that for a very short time. It is a wasted effort. This is the short-term thinking that I was referring to. Please read a message before commenting on it.

    It's not wasted because the European Union may be seen as next to a precipice. If it falls now, who knows where it will stop? But if it can be kept away from the edge for a short while, it may right itself. That's why short-term interventions may save the long-term.

  • 0

    Farmboy

    How is Sarozy racist? He's Jewish.

    He's considered to be supportive of Israel, but I don't think he's Jewish. Where did you get that from?

  • 0

    Dale Berry

    I'm not rich, but I hope to be one day and I dont like the idea of someone taking 75% of anyones money to be honest. How can you warrant only letting someone have 25% of what they earned? I admit some rich people dont earn their money, but many do!

    *

    Just like that they are going to leave behind a thriving business and take it "elsewhere"? I think you've fallen for that simplistic conservative rhetoric. For example, if you had a chain of successful shops in France, are you going to close them all down and leave because you have to pay more tax? And how easy do you think it is to start a whole new business in another countr*y?

    Of course it will happen! that is why most industrial/production centers are in third world countries now, because of high tax and wage demands. Your example was a shop, that depends on people having money, if the government are taking more of it they are less likely to buy your product and then if you're successful 75% of your takings will go to the government. If you dont take it elsewhere you might not survive!

    Saying that I have nothing against socialism, great idea, on paper....

  • 1

    Mike DeJong

    Right on Tyger. I think Hollande's win is a breath of fresh air. The rich already have the best lawyers and accountants working on finding loopholes. Hollande just wants to make them more accountable.

  • -4

    Hôjô Sôun

    Zen Student.

    This reminds me of the Palestinians electing Hamas.

    Hardly a fair comparison Hojo Soun.

    I think it is, as both cases shows a populace voting in an emotional reaction against their own best interests and the best interests of the international community. I'd be very interested to hear why you think this is unfair.

  • 1

    zichi

    @Hojo Soun,

    I think it is, as both cases show a populace voting in an emotional reaction.......

    Hamas, at least according to the west is a terrorist group elected by forced voting and not fair and free. Hollande was elected by the people of France, in a run off election which was fair and free. You might not like their choice but nonetheless you'll have to accept and learn to live with.

    I think he'll be very good for France and the Europe.

    BTW, you think everyone voting in a Japanese general election do so without any emotional considerations. I know young women who always vote fot the most handsome? Please!

  • -5

    Hôjô Sôun

    BTW, you think everyone voting in a Japanese general election do so without any emotional considerations.

    Zichi,

    I never said that. Please show me where I claimed anything about Japanese elections.

    Otherwise an apology would be called for.

  • 0

    GW

    More taxation does not stop the irresponsible spending by governments, which is root cause of the economic distortions we are looking at. The more the Hollandes and Obamas out there tax, borrow, and spend, the bigger the eventual collapse will be.

    willib,

    I am not necessarily talking about more taxation(at least for the poor & middle classes) but for FAIR taxation, something a lot of rich dont pay when they shud

  • 0

    GW

    Thing is, by doing this, we, as immigrants, sort of get screwed. trying to send money home? Ouch. Try and have an account home? Nope. As it is already, Japan keeps track off where we send our money and Canadian and Aussie banks are reporting what we have and own to the J government. The Americans get screwed with double tax... We're the ones that are going to pay the price, not the rich guys who can still hire lawyers and tax accountants to get them off paying more.

    tmarie,

    I hear ya, believe me, my prediction is that countries are going to start coming down harder on the rich(which they deserve), hopely the little guys like us they wont hammer us too much more than they already do!

  • 1

    Frenchy92

    Hojo Soun

    Your view on the world seems to be rather black or white. French "socialists" are far away from former East block "socialists". I admit that the election of Mitterrand in the 80's was much more worrying at that time, especially with some communists ministers in the government. But that's old time. Still this election is a clear sign of the fear of people against uncontrolled financial mechanisms and behaviors that leave policies out of control of politicians. Not saying that politicians will save the world. But finance shall not be the only rule. Analogy with Palestinians and Hamas simply shows you do not know what you are speaking about.

    Amida,

    Comparison between France and Greece is just non sense. In France people at least pay their taxes...

  • 0

    zichi

    Hojo Soun,

    From my comment on Japanese elections, I never stated you said it, "I did!"

  • 2

    kchoze

    Dale Berry

    I'm not rich, but I hope to be one day and I dont like the idea of someone taking 75% of anyones money to be honest. How can you warrant only letting someone have 25% of what they earned? I admit some rich people dont earn their money, but many do!

    It's not 75% of their entire income, it's 75% of their income above 1 million. So someone earning 2 millions would pay the existing rates on the first million and pay 75% on the second. I'll also point out that few if any people earn that much money from their own work, they usually do so by owning shares or by getting way overpaid for being CEO of big companies. The idea that it's economically bad because it "discourages" work is meaningless as most of the people who earn those incomes don't earn them through their own work, so there is nothing to discourage.

    Though this would be about as high a marginal income tax rate as has been used in France, the US used to have even higher marginal tax rates. The highest marginal tax rate in the US after WWII until the 1960s was 91%. It was above 70% from 1937 to 1980. Contrarily to what faux "experts" claim, these tax rates accompanied the most robust and lasting economic growth the US have ever seen.

    I think that is because as most people who get such high income do it by owning or running a company, they were encouraged not to "cash in" on the company's revenues, but instead to reinvest that money into it. If the company grew in value, they would own more, but it wouldn't be "income" as such. So high income marginal rates encourage investments in the real economy. Also, it cut down on moral hazard, as we can see currently that when CEOs are paid too much, they become disconnected from the fate of the companies they run, they don't care if they run them to the ground because they have more money than they will ever be able to spend.

    Of course it will happen! that is why most industrial/production centers are in third world countries now, because of high tax and wage demands.

    And that is why free trade is an idiocy with third world countries. For the economy in the long-term, wages MUST be high. If wages are low, it incites economic decision-makers to waste human resources, the most universal and versatile resource the economy has. Low wages discourage investments to increase productivity, because it makes such investments unprofitable.

    Not only that, but production and consumption go hand in hand. Consumer spending must follow economic production, as what is produced must be consumed. But if wages are low, that means that consumers, who get their income from wages, don't have the means to consume what they produce. This results in increased consumer debts and in major economic crises. It is not a coincidence that the two moments in the past 100 years where wealth was the most concentrated at the top were 1929 and 2007, and both saw major financial crises follow.

  • -1

    okimike67

    What ever happend to "Plant the Seed and Reap the Reward"??? The mantra of the day is now "You plant the seed and I will reap your reward". If the so called 99ers would get off their whinning butts and worked hard (and I dont mean by sticking their grubby paws out) they too may have some success. But, when the "Masses" are promised someone elses money its no wonder the sheep vote for them. Something for Nothing always attracts a mob!

    And all of you that promote and condone this mentality..... prepare to PAY! Only can spread the jam so thin till there is nothing to spread! Proven time and again, simply not sustainable. And those that dont learn from failure are doomed to fail again!

  • 0

    ka_chan

    Merkel's government is most likely the next to fall. Austerity in the face of deflation is idiotic. It causes the more deflation. It also doesn't make the voters happy. France has had Socialist governments before and it will survive just fine. The problem with the Euro is that the European union isn't really a union, just tied to a common currency. You see more countries swing to the left and so will the US. Remember, in the 1960's everyone in the US was a LIBERAL and today the it's being CONSERVATIVE. It's as if the old USSR was communist... they claim to be but not by definition.

  • 0

    state broken people

    i think this is the change that Occupy Wall Street is looking for all over the globe.

    francois hollande is the owner of three holiday homes located in the french riveria. but if asked i am sure he would say 'v for vendetta' was a really cool movie. and so deep.

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