France and the temptation of financial repression

In recent weeks, France has provided a playground for supporters of financial repression. Sometimes from the left, sometimes from the far right, sometimes from the centre, various proposals have been put forward with a view to capturing the wealth of the private sector or curbing its expected return. Some have proposed a forced loan with a negative real yield, others an intervention by the ECB to cap interest rates, not to mention the many amendments to the draft budget to further ramp up fiscal pressure. What all these initiatives have in common is that they leave out any serious effort on the spending side. Yet this is precisely the root cause of France's budget deficits.