An Eye on Europe

Greece close to defaulting on its debt. In France with their election coming, the European Commission warned in its winter economic forecasts this morning. Brussels noted that the French budget deficit is on course to hit 3.1% of gross domestic product in 2018, just exceeding the euro area’s agreed 3% limit. There is also a risk that the deficit could breach the limit this year. Although a long shot to win, Marine Le Pen has vowed to rip up EU spending rules, taking France out of the euro-zone and embarking on a huge deficit spending program. Don’t overlook the increasing turmoil in the EU; each year that passes the Union is unraveling. And Italy also in the mix with huge deficits amounting to a record 132% of GDP in 2016, and will increase again in 2017. Most of the outward focus from the media and investors currently centered on Trump, Yellen and the US; but Europe is increasingly worrisome.