The Most Worrying Chart For Europe's Stability

Tyler Durden's picture

While we have historically noted the explosion of youth unemployment as a key factor for instability in Europe, there appears to be an ever more concerning indicator of the potential fragility of the European Union. As Bloomberg's Maxime Sbahi notes, the difference in economic performance (and mood) between France and Germany, often referred to as the European “engine,” is at a record high. This disparity is likely to weaken France and isolate Germany further, heightening political tensions and indecision in the euro area.

And the "mood" of the people - perhaps even more contentiously - is near 30 year highs...


Via Bloomberg Brief,

The political consequences of these economic gaps are growing clearer, though the differences in underlying policy choices have been visible for some time. Last week’s European Parliament elections provided a first glimpse of the political shakeout, with the victory of the National Front in France. The country will send a record 24 euroskeptic members to the European Parliament in a total delegation of 74, compared with seven out of 96 from Germany.

Disagreements between the two EU founding members are likely to intensify as past common interests are now strained by increasing economic divergence. Recently, France has repeatedly argued for a relaxation of fiscal targets and called on the European Central Bank to be more proactive to weaken the euro. Germany has retorted by insisting on the ECB’s independence and respect for fiscal discipline, directly warning France against non-compliance with budget commitments.

If the French economy continues its slide from the euro area’s core to the profile of a periphery member, new standoffs are likely to materialize, weakening the Franco-German relationship that has provided leadership in the past. This might slow down the functioning of the euro area, where decisions are mostly made between heads of government in summits. Over the long term, one of the most disturbing consequences is a potential lack of a common strategic view for the euro area’s future at a time when direction is needed more than ever.

If its historic partner is downgraded to a junior status, Germany may grow even more powerful on the European stage. The country may find
itself in a more isolated and uncomfortable

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knukles's picture

"Fuck the EU"
   -senior US diplomat

NoDebt's picture

"Germany may grow even more powerful on the European stage."

Really?  Ya think?  2011 just called, they want their news flash back.

hairball48's picture

ROFLMAO!!  I was thinking along those lines but was too late at the keyboard.

Well done, I agree. Some people just haven't been paying attention.

doctor10's picture

It has taken Germany 100 years-but they finally may claim control over much of Europe-and they can't get rid of it fast enough!!

disabledvet's picture

It is interesting that Europe is flying apart just as Ukraine wants to join.

Hmmm. "Maybe we should just call Ukraine Europe and Europe Ukraine" and call it a day.

ebworthen's picture

Germany will leave the Euro before anyone else does.

France will hang on to the bitter end.

Oldwood's picture

The EU is the promise of something for nothing so of course France will be the last to leave, and Germany knowing that they will be the ones funding the gravy train would be only exercising good sense to leave yesterday.

orangegeek's picture

Too much invested in the Euro and getting small in the face of Asia is not a good idea - and they know it.

shovelhead's picture

The People of France are so stressed at their lack of productivity that they voted themselves another 6 week vacation to recover.

hairball48's picture

Fuck the frogs. I can't wait to see all the farmers fucking up the roads with a "tractor march" this fall.

These stupid morons haven't figured out that the Euro cannot work under the current currency union as it is presently constructed.

user2011's picture

Come On... who care about charts. All the "market" is preprogrammed and executed by HFT. Fundamental and Technical analysis are dead. It is all about artificial manipulations.

AdvancingTime's picture

If things get rough across the globe expect eyes to return to problems in Europe, where they continue to talk. I have not written much about the Euro-zone as of late because nothing is really happening.

The Euro-zone is engaged in a talkathon, with fear of an immediate collapse off the table the members of the Euro-zone much like their political counterparts in America just talk about solutions without any action. For us in America news from across the pond dribbles out in small doses with almost daily media boost of promises that things are getting better. For more on all of "what is not happening" see the article below.

Joe A's picture

Cameron of the UK threatened to leave the EU if this Juncker guy becomes the next president of the EC. German politicians saying "go ahead punk, make our day". Germany now has this powerful position in the EU but considering the past they are quite reluctant to act that way. France is in a weak position. They either reform or thing will remain the same or even get worst. It is too complicated in France to make a company for instance. Although historically touchy, Germany should look east. Poland and Germany should hook up more. That will create a strong block and secures Poland against Russia. But the EU should have good relations with Russia as well. That is not what Obama wants to hear when he comes to Europe this week but politicians and people think differently about Obama than when he came to Europe on his first trip (not even being a president yet but already attracting a crowd of tens of thousands in Berlin which was quite embarrasing. I wonder what these people think of him now).

Remnant_Army's picture

Wednesday, May 16th, 2012 

"It will start in Europe.

Your banking system will be the cause and Germany, once again, will be involved in this tragedy as it was on the last two occasions.

When it commences much will be over saving the economy and catastrophe will affect Greece with much fallout in France."

orangegeek's picture

Consumer sentiment is driven by MSM pump.


If you say it over and over, the truth no longer matters.


Repeat after me or read it in my headlines, "global recovery is back, everything is fine".


Have fun on the ride down Germany.

Muc Metals's picture

The French folks are an insubordinate bunch.

Germans not so. Germans are not renowned as natural revolutionaries.
Lenin is sometimes said to have joked that German revolutionaries would
not storm a railway station without first buying a platform ticket.

When you'll see smashed shopwindow glasses and burning shops at Champs Elysess
then you'll know that real revolution in Europe has started. It will not begin in Germany.
It will start in France.

Ever been to Marseille? All those young new French citicens from the former colonies,
having nothing to lose. When they start marching, expect nice fireworks going off
in the heart of Europe. Jihad in Disneyland, Paris.