The Indispensable Country

“The graveyards are filled with indispensable men.” – Charles De Gaulle

Source: Le Monde

Among the ironies of Sunday’s march in Paris were leaders from Saudi Arabia and Russia demonstrating on behalf of free speech, while US leaders avoided the procession. But irony aside, the direction France now takes matters immensely to the rest of the world. Initial reports indicate that over 5% of France’s population attended Sunday’s rally.

This matters because France is Ground Zero for globalization. Without France there is no European Union and no Euro. France’s economy is stagnant, and highly regulated. Most retail stores, for example cannot open at all on Sundays. France ranks 70th in the world in economic freedom, well-behind Canada (6th), the US (12th), Germany (18th), and even Ghana (66th). At least it is ahead of former colonies Morocco (103rd) and Tunisia (109th).

After last week’s terrorist attacks on Charlie Hebdo, France could move in a nationalist, nativist direction, seeking to protect its economy with more regulation and barriers. We know how that would work out. Or it could open up and deregulate its economy—currently the 5th largest in the world, and second largest in the EU—to unleash it’s inherent potential for growth. The current finance minister has proposed some modest reforms moving in this direction.

The Euro is both an economic and political project. For all its flaws, it has lowered trade barriers within Europe and facilitated significant financial projects. It’s success is critical to global economic growth. And France is at the heart of the Euro. They’re the bridge between Germany’s economic engine and the troubled economies of southern Europe.

That’s why Paris is important.

Douglas R. Tengdin, CFA
Chief Investment Officer
Phone: 603-224-1350
Leave a comment if you have any questions—I read them all!

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By |2017-07-17T12:23:07-04:00January 13th, 2015|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. - Leave a comment if you have any questions—I read them all! - And Follow me on Twitter @GlobalMarketUpd

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