France: Farewell

Paris is a remarkable city, full of culture and history.  It is easy to become enamored with the city when in the shadows of the Eiffel Tower, the Arc de Triomphe, and the Sacre Coeur.  Eating a croissant in Paris never gets old.  But do good pastries translate into good profits?  In my mind, I have been comparing the discussions and conditions today with my last visit to Paris at the height of the Greek crisis in 2011.  As Mark Twain said, history doesn’t repeat itself, but it rhymes.


In 2011, the prospect of Greek default and Greek exit from the Eurozone sent shockwaves across global markets.  In 2015, there is a sense of “Greek exhaustion” among France’s policy makers, industry professionals, and even from the average Parisian (I strike up economic discussions everywhere…).  Here are a few broad takeaways:

The Greek crisis is emblematic of the most important issue facing France—how best to balance the challenges and opportunities surrounding a European identity versus a nationalistic French identity?  The question of “Europe” becomes a guest to every economic conversation I have had in France.  Pan-European solutions require ceding sovereignty to “Europe,” and many here in France worried that

“Economic Europe = Germany.”  A question about the French economy repeatedly moved to the Euro, the common market, budgetary constraints, and landed at the Greek crisis.

There is a clear feeling that the French value economic security and stability rather than valuing growth and innovation.

Competition is driving the need for change and the opportunity for growth.  There is a clear feeling (I know that this is a qualitative judgment rather than a quantitative analysis) that the French value economic security and stability rather than valuing growth and innovation.  Both the population and policy makers are not eager to upset the status quo unless economic and financial conditions force there hand.  Both policy makers and industry professionals highlighted improvements that have come from reform and competition.  It is a clear question in my mind how far this can go, and it may limit long-term growth in financial markets. 

Crisis drove some necessary reforms and competition.  A weak Euro is significantly contributing to modest recovery in France and Eurozone.  Even the projections from the Bank of France do not have France exceeding 2% GDP growth in the next three years.  From my view, there is a sense of relief that the prospect of recession and deflation have dissipated, but a sense of fragility that a macro or geopolitical shock (Greece?) could upset the delicate balance of Europe.  Similar to my conclusion in 2011, it seems the country, the economy, and financial markets are still trying to find the balance between “Europe” and “France” in 2015.  I am glad that my business partner, Ryan Hessenthaler, will be back in Paris in August as part of his Investment Trek so that we can compare notes.