Nicolas Sarkozy's New Hampshire Vacation

I grew up in France and I return there often for work. During each visit, I am amazed at how uncompetitive France has become in the global economy and how despondent young Frenchman are about the future of the country. I believe that Nicolas Sarkozy is far and away France's best President in years (maybe ever), and while he is obviously too much of a politician, he is the only one who can bring France back from the brink of economic collapse.

I found it extraordinary that Sarkozy would risk his strong approval rating in France by spending a vacation less than 3 months after his election in New Hampshire. The US and Americans are no more popular in France and in French media than the French are in the US media. Certainly, word of a US politician, any US politician, vacationing in France for an extended period these days would be a political death sentence. So, I am impressed, the guy is a risk-taker by coming to the US.

I hope that Sarkozy has an amazing time in the US. While New Hampshire may not be the best place to learn about US ingenuity, about how the US uses its diversity to its advantage, and about how diligent Americans are, I hope that he sees it. I hope that he can bring it back to France. Maybe he'll also see some of our flaws.

There are three things that I am certain that he is going to notice:

1) That America is dirty cheap in Euro terms. That he would not be able to enjoy the same level of comfort during his vacation at the same cost in France, or for that matter, anywhere in Europe. He will easily see that he could buy all of New Hampshire if he wanted to.

2) That Americans cannot buy any French goods anymore because everything is cost prohibitive. Not only are big ticket items - such as French nuclear plants or cars or appliances out of reach - pretty much all French things are out of reach right now. At this point French cheese and wine are cost prohibitive and certainly dramatically more than comparable domestic wines and cheeses.

3) Asian and Latin American goods flood US markets as these currencies remain weaker against the dollar.

Sarkozy strikes me as a "can-do" man who is bent on making France competitive again. I don't know that he is going to return from his vacation having resolved to model France on the US. But, he will obviously see that France has been the biggest loser in the US decision to crash the dollar. I am willing to bet that he is going to exert all of France's influence as one of the two largest countries in the European Monetary Union to drive the Euro lower versus the dollar.

We may have already seen the beginning of Sarkozy's influence as last Thursday's decision by the European Central Bank to inject about 95 billion Euros into money markets to avert a liquidity shortage following the BNP Paribas announcement was extraordinary. This amount was twice that injected following 9-11-01 by the ECB and should alone have caused the Euro to slide dramatically.

I would expect more monetary loosening and other ECB action very quickly, at France's insistence, to make the Euro fall.