Ritika Janiya
Kicking the kicks, the UK is booming at double France’s growth rate according to fresh data, placing President Emmanuel Macron in an even tighter spot. With the boom of the UK economy at 0.6 percent growth while that of France lags behind at 0.3 percent, this spells further embarrassment for President Macron after France’s credit rating had been downgraded recently.
In the news recently, the UK economy has been zooming ahead, while that of France has been trailing behind. This has created serious troubles for French President Emmanuel Macron. Let’s dive into what’s been happening.
It has emerged from new reports that the UK economy grew by 0.6% in the second quarter of the current year, hence leading the race in economic growth among the G7 countries that have made a gathering of the world’s biggest economies. In comparison, France’s economy just registered a 0.3% rise during a similar period. That makes a very clear difference, leaving the UK much ahead of France in economic performance.
The UK’s strong rate of economic growth comes essentially from its very large and diversified service sector, such as IT, legal services, and scientific research. The performance of these sectors has been outstanding and is being a great source of economic impetus. Liz McKeown, head of economic statistics at the UK office of the national statistics, said that the UK economy has grown remarkably over the last two quarters. This is a big improvement from the weaker performance seen in the latter half of last year.
However, there are many economic issues in France that make life hard for President Macron. Recently, France’s credit rating was downgraded. Such a thing happened in June when Standard and Poor’s, the company that grades the creditworthiness of countries, downgraded France a notch, from AA to AA−, due to higher budget deficits than it had forecast and political instability.
Standard & Poor’s accepted that France had done something positive regarding changes in the labour market under the leadership of Macron. However, the rating agency was very apprehensive about the capability of the French government to continue making relevant reforms. It said that the inability to hold a strong majority in the French parliament could make it hard for Macron to push through further changes. Political fragmentation is a situation in which there is no unified political front. This adds to the uncertainty about France’s future economic policies.
Let me tell you this has been such an embarrassment to Macron, especially after the recent downgrade of the credit rating. The latter mirrors doubts on the side of France’s ability to manage its finances as well as to continue with the recovery of its economy. The credit rating is very important since it affects how much interest a country pays after borrowing some monies. The lower the rating the higher the interest rates and this could put a country into more financial trouble.
Besides economic challenges, Macron’s government has had to face political instability at home. The government faced criticism over everything from the management of the economy to social reforms. This lack of political stability leads to an increase in the difficulty for the government to make its policies, which can provide long-term growth and maintain budgetary issues.
These developments will be a rude shock for Macron. If the UK sees continuous successes in economic terms, he will face pressure to find ways of improving France’s economic performance, which means looking at the country’s issues with debt, provoking the political class, and proposing reforms that can actually strengthen the economy.
The sharply contrasting performance on both sides of the Channel underlines the problems Macron will face. A booming economy is one of the few bright spots for the beleaguered UK government, while the specter of slower growth and a credit rating downgrade caused complications for Macron. The coming months will be crucial for France to try and recover lost ground with its economic peers.
That therefore leaves the huge economic success of the UK in very marked contrast to the difficulties of France, no doubt placing President Macron at a very difficult position in the current scenario. The faster economy of the UK, coupled with the problems in France, such as credit rating downgrade and political instability, does put Macron on the hot seat to set things right and mend France’s economic fortunes.
