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Wednesday, December 4, 2024

France and Germany fighting crises leave Europe directionless and adrift.

Europe’s biggest economies, Germany and France, are facing political and economic challenges. Business activity in the manufacturing and services sectors in both countries decreased more than expected in September. Germany’s composite PMI fell to a seven-month low of 47.2, while France’s hit an eight-month low of 47.4. The overall euro zone business activity also dropped to 48.9 in September. Germany’s economy has been struggling for over a year, with expectations of minimal growth. France is also facing fiscal challenges under new Prime Minister Michel Barnier. Analysts predict economic and budgetary reforms may be delayed. The rise of the far-right poses a threat in both countries, with parties like the Alternative for Germany gaining popularity. The center in the European Union’s two largest economies is imploding, according to Ian Bremmer, founder and president of the Eurasia Group consultancy. In France, the far left and far right performed well in a snap parliamentary election, but are now excluded from the unstable minority government led by the center-right’s Michel Barnier. This has left their constituencies angrier, while their leaders refuse to take responsibility for governing their way out of the troubles. Bremmer noted that this arrangement keeps President Emmanuel Macron in power for now, but it only serves to make the extremes more powerful in upcoming elections. Similar political developments are occurring in Germany, where Bremmer predicts continued growth in popularity for the far-right AdD party due to its anti-migrant sentiment, economic populism, and opposition to support for Ukraine. Despite a strong European Union with consistent leadership, domestic policies in these countries are increasingly against the establishment, reflecting a broader trend of fragmented globalization. Bremmer emphasized that there is much to observe in these evolving political situations.

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