Nicolas Sarkozy's New Hampshire Vacation

Nicolas Sarkozy was elected President of France in May and, in an extraordinary break from tradition, is spending his first vacation in office not in the Cote D’Azur, but in New Hampshire. Here is what he is likely to find.

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.

Ari Socolow
Ari Socolow: Ari Socolow is the Chief Economist and Editor-in-Chief at BestCashCow. He is particularly interested in issues relating to financial literacy and bank transparency. Since co-founding this website in 2005, Ari has been frequently cited in the media as an expert on local and national savings accounts, CD products, mortgage and loan products and credit card rewards products.

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Comments

  • JoeNPhilly

    August 12, 2007

    If he is like most middle-aged Frenchman, he isn't paying any attention to anything but the women around him for the next month while he is on vacation.

  • CherylW

    August 12, 2007

    I was also surprised that he decided to vacation in New Hampshire. This was definitely a signal. The French are stubborn though and they may prefer the high Euro because it gives them more global buying power. In the end though, their power is limited because they have to work within the EU framework.

  • FriedaG

    August 12, 2007

    The French are finished. They are a big Disney World and lack the ambition and work ethic to remain competitive. We will demolish them and the Asians will demolish us.

  • Pierre

    August 12, 2007

    @FriedaG: You clearly have never been to France. I suggest you visit and see that France is on the move.

  • Jean Francois

    August 13, 2007

    He is going to have a hard time dealing with the fact everybody expects the state to take care of them while they spend their lives on vacation, and an impossible time with the fact that every inch of France has been overrun by Muslims who want to convert the place into an Arab stronghold. There are five times as many French living in the US (myself included) as Americans in France, and there are good reasons for this.

  • TDwyer

    August 13, 2007

    This video of Sarkozy drunk at the G8 summit will change your view of the man:

    http://www.youtube.com/watch?v=1uxb0JHqzlA

  • jME

    August 25, 2007

    I am not sure that Sarkozy is going to be able to weaken the Euro versus dollar and other major currencies. Interest rates are falling in the US and Japan again. He faces some real challenges with this.

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