In Europe, the official French unemployment rate just hit the highest level in 14 years at over 10%! And I hold grave concerns for the French economy under the stewardship of the Socialist François Hollande.
As an example of the economic insanity being shown by French politicians, Steel maker Arcelor-Mittal was recently threatened with the nationalisation of one of their steel plants after it announced in October that it intended to shut down the Florange plant’s already inactive furnaces, saying they were uncompetitive in such difficult trading times.
Yes you heard that correctly. The French government was threatening to nationalise the assets of a private company.
Mish’s Global Economic Trend Analysis website quoted Pater Tenebrarun’s comment that:
‘Montebourg [The French minister for Industrial recovery] makes it sound as though Arcelor-Mittal, a private company, were deputized to the French government to help it fulfill whatever political aims it pursues – as though the government could simply draft private companies to aid it in attaining its socialist goals.‘This case is going to have repercussions that go far beyond the fate of the loss-making furnaces and Mittal’s continued presence in France. By threatening the company with nationalization if it doesn’t comply with the government’s wishes, Montebourg is signaling that his government has absolutely no respect for property rights.
‘If Mittal closes the two furnaces (which as noted above have been idled for many months already), then the people employed there will lose their jobs which is of course unfortunate. However, this is a typical case of the road to hell being paved with good intentions: by threatening the expropriation of Mittal, Montebourg ultimately risks far more jobs than merely those at the two furnaces.
‘There is a lesson that Mr. Montebourg has yet to absorb: No government can dispense with the laws of economics by decree. It might as well attempt to order the sun not to shine or issue an edict that gravity be abolished.’
Murray Dawes
Slipstream Trader
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