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May 3rd 2005

French vote threatens future of EU

On May 29th, France will vote on the EU constitution. If the people vote ‘no,’ as most polls currently predict, the EU’s future  will be severely jeopardized.  With a sluggish economy and high unemployment, France’s economy is among the worst in the EU. The French have found scapegoats for their economic malaise in the newest members of the EU, certain central European nations, who are enjoying unparalleled growth. France has accused these nations of stealing valuable capital and jobs, with their high interest rates and low wages. Much of the reason these economies are performing so well however stem from expectations that they will soon be allowed to switch over to the Euro currency. A French rejection of the Constitution will delay this change, as well as many other economic benefits promised to the new members within a few years. The International Herald Tribune reports:

Eastern European currencies may look a little rich at present, but valuations are being supported by large capital inflows into the region and the buildup of foreign reserves. A decrease in foreign direct investment would be…damaging to Eastern Europe’s capital markets.

Read More: Stocks to adopt if the French vote no

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Posted by Adam Kritzer | in Euro | 2 Comments »

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2 Comments of “French vote threatens future of EU”

  1. Jeff Davids Says:

    Interesting article. I’m having a close eye on the development. Personally I think they will vote no to the constitution this round, but I don’t think it will have a great impact, as a negative vote is expected. I positive vote on the other might stir things up a little.

  2. H-Damien Says:

    The french vote will be ‘yes’.
    Polls results favour a yes at 52% and growing.Once the French will have the impression they have had a real choice and the opportunity to discuss those issues publicly, then they will vote yes.
    It’s a false impression to think that European institutions would be severely jeopardized ; just slowed a bit.It’s all about politics.
    You do not stop a movement that started more than 55 years ago. There is a real desire to build a united Europe but not at all costs.

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