Gordon Brown states that France will crumble next

I am wondering how many of you can distinguish between economics and what financial journalist particularly but also others including politicans are calling economics? That is not a criticism but more a comment on what is being thrown at us as 'gospel' truth. In fact much of it is populist finance speak from people involved in (you all guessed) finance rather than economics. The reality is that banks and other financial institutions are getting richer by the second on the back of the supply and demand for futures and their derivatives. In effect, rather than companies existing to produce and make profits, financial institutions are looking some years ahead and pre-measuring 'asset classes', which are property to be planned let alone built, cars to be design some time, oil, gas and other forms of energy along with metals, other minerals, etc, etc, to be discovered, designed, developed and so on. It is no longer as simple as 'ordinary' people wanting commodities as most of you think. Financial markets are accrueing vast amounts of profits to invest in futures which are bought and sold at even greater profits for the wealthiest individual or corporate investors. We are simply the desirable end market and even now some futures are so far ahead of time that not only we but also our children will probably be long gone before those things become tangible. If any of you wish it is easy enough to read up on this topic with a simple websearch and you will find all the factual, pro, contra and whatever type of detail you want.

The biggest problem with this is that nobody knows anything for sure. Gordon Brown is a dull human being as we saw when he was PM, a real Calvinistic Scot, but he knows his economics. However to say what he did was asking for trouble, he may be right or wrong, but even he may well not live long enough to see either way. So why did he bother.

The reality is that after the 2008 crisis the financial services industry has changed little but has developed lots of very clever strategies for circumventing regulation and making more and more money. It is the proverbial bubble but nobody knows if or when it will burst. The EU and all of its problems are mainly conditioned by that. Thus Berlusconi, for example, as an immensely wealthy media network owner (plus plenty of other bits and pieces) was both regulating and circumventing, thus creating massive profits and debts simultaneously. The debts reflect on the nation, the profits probably go to Swiss accounts or their ilk. France is far from immune from this and so make or break in never ruled out. It matters little ultimately whether one is pro or contra EU and uses € or £ because both are as susceptible as the other to the bubble bursting. Indeed, the biggest risk is the $ going pop and dragging everything down with it. So why do you think China, India or Brazil want a strong Euro? Obvious when you are aware just how precarious the global economy is and the use of a single standard ties everybody to the USA's performance. The Euro has to survive for those who need a stable currency package as the US dollar has been since WW2 without a break. Sterling, sadly perhaps, is becoming sidelined and that is what such people as Osborne and Cable are trying to not admit at present. If the Euro goes down then Sterling will go down but the bottom line is that both may well follow the dollar unless Europe consolidates to buffer the effect. Back to the futures, regulation and so on, it then depends on a complete political rethink and massive amount of reregulation, actual financial laws and institutions to oversee that to stop the entire conomy bleeding into the hands of a small banking elite who are trying to grow it beyond the amount of currency even available on paper. Indeed, currencies are themselves part of the futures and people invest on their value so many years ahead. It is, unless you happen to be as rich as Croesius with little chance of losing the lot, speculative madness and has to stop somewhere. To that end the EU has the potential as a body but never as single nations to move in that direction. Would they achieve it? Ask anybody another...

I beg your pardon Nick.

I should have said 'Are you' rather than "you are....' and you are right it is patently obvious but that particular line of retoric is being used currently by all and sundry to infer that the UK alone will be in S*** street if the don't cowtow.

You are quite right to be pro euro, I am neither pro or agin the euro. Like you I am earning a living from all Europe while currently residing in France and find the euro eases my passage across the continent, although I'm glad that my main currency is Sterling as the value of the Euro differs from country to country in general cost of living, but the thought of the whole of Europe being run from Brussels both fiscaly and politicaly fills me with fear and dread. Due to the fact that when you read 'Europe' read German then French self interest. Don't get me started on the CAP and French agriculture.

My brother in law is Austrian and he and the family live in Munich, I also deal with many German companies and of course we discuss unification, and most, not all but most of the folks I deal with in Germany want a referndum so that they can vote no to a united europe.

I deal with many companies here in France as well as chatting to neighbours and I get very much the same type of response. I admit it is a very narrow straw poll.

But of course no-one will get a referendum while the politicians believe that the no vote will be a majority, look at Ireland and the Lisbon treaty.

I like Europe or rather the continent of Europe, I like the different nationalities that make up Europe, now can you honestly see France and I mean the nation of France not the politicians, givimg up its nationality unless it is in full control? Knock on your neighbours door and ask them if the want to be ruled by Brussels and I mean properly ruled not just saying yes then ignoring everything as is the current pattern.

It has been said that peace could be threatened if the Eurozone collapses, well personally I feel that unification will be a bigger threat to European peace in the long run especially while democracy of the populus is being stifled.

But I digress, Euro sceptic...? yes does that mean I hate Europe... no. Do I hope that the politicians actually manage to bring the situation under some control...yes, do I believe that they will?..... I don't have your faith.

I think Tina pretty much hit the nail on the head.

If you are in the position to put your head down and carry on regardless great, if you can't and you have to make a living more widely, potentially the next decade is going to be a rough ride. I hope that you and I will be in a position in the future where one of us can say to the other, 'told you so'. Right now I wouldn't put money on either outcome.

John, I think you are being a little frivolous suggesting that I inferred that only the UK economy would fail, it is patently obvious if the Euro were to fail all Eurozone economies, with the possible exception of Germany would also be sent straight into a massive recession or worse.

Why wouldn't I be pro Euro living and earning my living in Europe. I can infer from that comment that you are a Euro sceptic?

Mervyn King has said we are currently half way through a decade of liquidity issues for the whole of the Western economies, and I have seen nothing in the current issues other than these.

That is a very euro party line you are taking there Nick, and it is the same scare tactic that the polititions are taking.

"If it does go, the fall out for the UK economy would be nothing short of a catastrophe. The UK would be sent into a vicious recession , if not indeed a depression the like of which we have not seen from since the 30's."

You are trying to make it sound like only the UK will suffer any major effect should the euro go. I am neither in favour of the euro going or staying, it is already going to take the western economie years to recover from what has already happened and regardless of what unity the main european countries are currently showing the under current will always be one of self interest, if this was not so Germany and France would have nipped the whole episode in the bud much earlier, rather than asking China to pay for their debts.

So as said before it is not what if but when and how bad.

I'm not sure I agree with your analysis on this John. I believe the austerity measures now being enacted will secure the Euro, both Greece and Italy have seen the light and replaced their goverments. Portugal has already implemented strict austerity measures , so will Spain. I have every confidence that France will work with Germany to resolve this crisis.

For those neo-cons sitting on the side lines and cheering for the demise of the Euro should really start taking some economics classes. If it does go, the fall out for the UK economy would be nothing short of a catastrophe. The UK would be sent into a vicious recession , if not indeed a depression the like of which we have not seen from since the 30's. So be very very careful what you ask for on this one. It could take the Western economies decades to recover, if ever, as the balance of power may well have shifted to the far east.

Nick, I am sorry but you appear to be putting the cart before the horse. It is very easy to say that creeping de-regulation is totally to blame, hindsight is a wonderful thing.but if Mr and Mrs Joe Public hadn't spent what they don't have the banks etc would not have been drawn into the mire of catering for their needs, for if there is no demand there is no sale.

One of the reason countries re broke is simply because its citizens wanted more and more, whether it have been a higher credit rating in order to buy ---"must have" items --- governments were borrowing like fury trying to pay for the "pledges" they made when electioneering. Simple logic is this, my children when young didn't have the latest state of the art toys, they had what we could afford simply because in those days , (thirty odd years ago),credit as we know it was not in existance, you had to put your best suit on and grovel before the bank manager in order to get a small loan. These days the money spent on kids alone ,just in order to keep pace with their peers is astronomical, mutlipy that a few times by the amount of kids and you will have a gaping great cedit hole, and thats JUST ONE example.

Today you can walk through any town centre where all the big muliples are, go into the "reception" sign a bit of paper and that qualifies you for 10000pounds worth of credit from that shop, mulitply that by four or five large stores and you can 30 /40 /50 thousand pounds worth of credit , you don't worry about paying it back, or of the interest accruing, as long as you can afford the monthly amount you carry on borrowing.

Another simplicity is this, just look at how many credit cards Mr and Mrs Joe Average have --- v isa mastercard --etc etc now add that to the above and ther you have a grat deal of the problem , because all this creditHAS to be scourced, and thats where the banks came to the rescue, and crippling the economy.

Of course it wasn't JUST that, there were a multitde of events causing the present problems, but if people hadn't taken advantage of credit etc and overspent themselves they would still have money in their pockets and wouldn't be screaming blue murder because of the bitter pills they are having to swallow.

I take your points on board Nick and currently I would agree that the UK's debt burden is greater than Frances but it is the ability to pay it off that counts, you may have a 50% mortgage on a million pound property, I may have a 30% mortgage on a 350k property but if I can't service that debt then my position is more perilous than yours regardless of the debt size.

Today Frances fiscal future is in the hands of Greece and Italy, if either of them default Frances position is more perilous than the UK's although the UK will not be untouched by this. Germany will not bail France out if it all goes pear shaped, China is not going to ride to Sakozy's rescue and the markets are sat waiting like vultures, or may be wolves waiting to attack.

The fundamental causes of the crisis are pretty much irrelevent, they may have started the ball rolling, perpetual motion has now taken over, dominoes is a very good description.

It is no longer about why we are in this mess but more about how far/deep is it going to go.

As Gordon Brown is a well educated and thoughtful man. I think it always makes sense to listen to the words someone like him says. I don't particularly agree that France is in any more perilous position than any other of the Major European countries, and is in a less perilous position than the UK, which has a significantly worse burden of debt and adverse GDP leverage. The reason Britain has had to sack hundreds of thousands of public employees is because it is incredibly indebted, and the supposed growth in private sector jobs has not materialised.

I do find comments rather laughable that blame the current global crisis on the over spending abuses of the average citizen with their Barclaycard. It is well known to studiers of economics that the fundamental causes of this crisis were the retraction of the checks and balances that were put in place after the great depression. They led to creeping de-regulation over the last 30 years. The worst excesses of free capitalism were then let loose on the markets by Greenspan and Bush.The reasons countries are broke, is because their banks bought too many CDO's, CDS and derivatives all hoping AIG's insurance would save them, which it couldn't. AIG has technically been insolvent ever since.

A great book to truly understand why we are in this mess is by John Lancaster - Whoops, why everybody owes everybody, but no one can pay.

A report by the Lisbon Council think-tank ranked France 13th out of the 17 euro economies for its overall health and ability to make rapid adjustments to its economy.

Its Euro Plus Monitor report said: “The results are too mediocre for a country that wants to safeguard its place in the top league ... Alarm bells should be ringing for France.”

No matter what european country you are in or from, the brown stuff has still not quite hit the fan.

You can't tax the jobless to pay for pensions, health care and bailing out other economies and those who are productive (so not civil servants or state employees) can only carry the tax burden for so long.

As with most things the next few years are going to be rougher for some than others, most of europe is in the s***, we're now just waiting to see how deep it's going to get.

It does not matter how much a government guarantees, if it has no money it can't pay out and this is only one of the current problems, France may have low personal debt but the French government and banks are up to their eye balls, so pray that Italy and Greece do not default.

Richard, I tend to agree. My wife and I have no debts at least nor did we ever have any rather than a few quids under a hundred. But yes, what you say is a big part of the greater picture. However, the politicians we choose by choice really or by others or default (as with the coalition) are what we get and instead of moaning (yoour good choice of word) we should do something about it by being far more discriminating and making demands of people who are candidates before they get into parliament, not when it is too late. They have a great deal of power to change things, even banks and after all they are supposedly serving those who moan!

Now that's ironic, a pundit knocking other pundits , so many people blaming each other, blues blaming reds and the reverse, there are only two groups where the blame should be laid and that is at the feet of greedy shareholders and Mr and Mrs Joe Public, ---yes the common every day human being.

For it was Mr and Mrs Joe Public that went out and on a plastic spending spree for over the decade or so, pushing themselve so far into debt, thinking just about today and not what might happen when the bubble burst. Banks in their turn realising they were in for a windfall of credit charges etc etc etc were only too happy to lend to them, the banks wanted more so they started massaging the system, they themselves going into great debt because Mr and Mrs Public were demanding houses they couldn't really afford and so and on.

Shareholders were equally as greedy, directing their fund operators to to tread on the thin ice, treating credit and false bond issues with gay abandon, well eventually the bubble had to burst, and boy did it go off with abang.

So here are, all sat around the the campfire, bemoaning the fact that governments are having to take austere measures in order that we can get back on an even keel and do it all over again later down the line. Funny though how its NEVER our fault, or thats what the pundits would have you believe?.

Come on everybody, we enjoyed it while it lasted, it was fueled by OUR greed, pointless moaning about it now the piper has to be paid.

french state guarantess up to 100,000 euros per client if a bank folds but I don't think we'll get there, well I hope not but seeing the news today, PSA, and the general way things are going...!

Europe, USA, UK certainly have major problems caused by too much debt. Asia, particularly China, is growing at a significant rate, mainly domestically. China has huge foreign exchange reserves, estimated at USD 3 trillion+ @March 2011, probably enough to guarantee a significant chunk of Eurozone debt but why should they. Eurozone governments have hardly been convincing about their unity and determination to solve the problem. Australia, where I live, has its own problems. The EUR, GBP and USD have depreciated 30% vs AUD since the GFC, which makes agricultural and other non-mining products more difficult to sell overseas. We are told that Australia came through the GFC relatively unscathed. Unemployment is around 5% but retail sales are languishing, probably because people are paying off debt and we pay too much for many things anyway. House prices are declining but they surged after the GFC due to government subsidies. I am sure the global problems will affect us, but so far there is no sign. The government has just passed a carbon tax, which might cause problems to the economy in the short term.

Exactly John, an enormous great smoke screen to hide the fact that UK politicians and their advisors are up to their necks in a mess they cannot even waffle their way out of. Blame the neighbours is the easy way out. Brown, I suspect, is preparing himself for an EU appointment in the future and is trying to create a reputation as a pundit. Sorry you lot but social scientists like myself are trained to be pundits and all we see is a nasty global picture right now and it may be pure irony but the two countries the UK are trying to knock, La France & Deutschland, are surviving better than most anywhere. The UK is not mightier than they are, cleverer or anything else. As much as I loathed the last period of party rule and the two PMs, this one seems to me to be as deep down the pits as any could be. Osborne knocks Europe at every opportunity but I would bet my last centime that if the Euro survives, has a successful run and Sterling does not thrive that he will be the first person to squeak and squeal about 'they' won't let us join one day. Not only Brown, but those who succeeded him might just pause for breath for a while - let's say 10 years - so that we do not need to hear their dull, inane utterances that have nothing to do with our everyday lives.

I suppose while Cameron , Brown etc are making great efforts to point out all of Europe's problems, it is a good smoke screen to take the focus off the UK problems. i don't think it matters where you live, the problems are world wide.

I think the everyday France is doing OK.

Personal debt is low

What I guess I am worried about is the French banking system collapsing, as they are very exposed to Greek and Italian debt, and the results of that as they work through to everyday life. Particularly Soc Gen who I am with. Anyone know what the Bank guarantee system is in France, and whether if there is one its worth the paper its written on?

If Gordon is referring the the exposure of French Banks to Greek debt, then he may have a point.

PS. Can everyone please wait to go and get their cash out of the banks until I have taken mine out please?

He is not an economist, that is all I shall say.

There’s a lot of wisdom in your comments, Richard - Red/Blue Left/Right don’t have much meaning any more. By the way, in spite of my Left leanings I don’t think I would stand for being called “brother” too often - sounds too much like a monastery for my liking. It’ll be very interesting to see just what kind of a leveller the current situation turns out to be…

Isn't that the standard though Colin, all smiles and spending when things look good and tears and tantrums when the proverbial hits the fan.

Unlike you I lean towards conseratism, couldn't stand being called "brother", and I was, and still am ,anti unions, although since dear Mrs Thatcher their limitations have been somewhat culled. I am all for a works union, but just against the idea that they used to call EVERYONE out on strike simply because "red Robbo" or one of his cohorts wanted a longer tea break.

The problem we have is though,regarding millionaire types running the country is the fault of the system, they have the contacts, the clout and the wherewithall to attain the higher level of politics simply by giving a "nod " here and a "nod " there to get what they want. The days of the "vocational politicians" are long gone. Same wih nurses unfortunately.

And these days, lets be honest, you couldn't push a cigarette paper between the difference of "Red" --- "Blue" -- and whatever the Lib dem colour is this year, so why bother voting for a party, why not just vote for the person, perhaps that might even bring back the "vocational politician" again.