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Pensions: the French are they right to be pessimistic?

October 26, 2011

September ten French believe their standard of living in retirement will be worse than their parents and 42% associate retirement with financial difficulties. Fantasy or reality?

What is a happy retirement? For a large majority of French people (seven out of ten) is to be financially secure before health, reveals a study by HSBC on the future of pensions published Wednesday. The survey found that 42% of French people associate retirement with financial difficulties, against 38% in the UK and 35% in the United States. 70% think that their standard of living in retirement will be worse than their parents, against only 37% of Americans and 22% of Britons. "Overall, in all developed countries, where growth is low, assets are worried about their retirement, said Jean-Pierre Wiedmer, Chairman of HSBC Insurance.But the extreme pessimism of the French! "

How to explain it? "There is a structural reason, argues Jean-Pierre Wiedmer: French are world champions of pessimism, according to a BVA poll published earlier this year. And one reason more cyclical: the public debate on pension reform in 2010 has alerted the French that the future of the PAYG was not insured. In fact, the ratio between active and inactive will worsen in the coming years. Today, France has 2.1 active Inactive for 60 years and over. In 2060, the ratio will be 1.5 or 1.4 for an idle asset, according to INSEE. This is because the number of seniors in the labor market does not increase enough to offset the increase in life.

Especially as senior on the labor market does not mean senior employment.The crisis and the deterioration of the labor market have indeed violently hit the elderly: the number of registered employment center for over 50 grew by 60% since 2007. The employment rate of older workers in France (41%) is thus one of the lowest in Europe. And the French questioned by HSBC do not envisage improvement: only 8% believe that the pension reform of 2010, which pushes two years the legal age of retirement, will solve the problem of unemployment of more than 55.

Increase the contrast level of pensions

That's why 57% of the French think that the amount of pensions paid by the system of national solidarity (general system of pension insurance and supplementary pensions Agirc-Arrco) will decrease in coming years.Yet in 2030, pensions paid by the general will average above 2% to 2.5% they would have been without the pension reform of 2010, according to a study of NACHA. Indeed, the decline in the age of retirement will allow some policyholders to increase their pension rights, with more qualifying period and new wages, generally high end of their career and therefore probably included in Top 25 annual salaries used to calculate the pension.

The average percentage, however, masks significant heterogeneity according to the profile of the insured. If nearly 35% of the insured should receive a higher pension than 6% on average, 18% have a pension lower by about 5%. In fact, an insured who left at age 63 with 3 years premium before the reform would leave always at the same age but with only one year of premium.In addition, almost half of the insured would see their pension amount unchanged with the reform. These are mainly inactive.

Finally, the most interesting in this study HSBC is the paradox between fear and actions. As they anticipate the majority of financial difficulties in retirement and they are concerned about a decline of public pensions, only 30% have set up a financial plan to make additional income in retirement, against 50 % in the rest of the world. And when we ask the French what they will do if the level of public pensions decline, 43% say they are willing to work longer and 27% to take additional paid work.

Consumer confidence up two points in October

October 25, 2011

French consumer confidence rose in October, conversely to the expectations of economists shows a monthly survey released Tuesday by INSEE.

The composite indicator of consumer confidence stood at 82, up two points from September.

The 17 economists and analysts polled by Reuters on average expected a figure of 79 and the most pessimistic estimates gave it to 78.

Fell to 77 in October 2008, the barometer of consumer sentiment had risen to 91 in early 2010.It evolves from September 2007 below its historical average of 100.

"The opinion of households on their personal financial situation, past and future progress: the corresponding balances each earn two points and households are also more likely in September to consider as appropriate to make major purchases" (3 points), INSEE said in a statement.

"Households feel the time is more favorable than in September to save. After the sharp drop in the summer (-8 points between July and September), the corresponding balance increased by 2 points," said INSEE.

In October, households are also less likely to anticipate an increase in unemployment.This indicator loses 12 points after a sharp rise this summer (23 points between July and September).

The INSEE survey is conducted each month (except August) by telephone from approximately 2000 households.

Berlin and the ECB are successful on the EFSF

October 23, 2011

Germany and the European Central Bank received Sunday the fund to support the euro, the EFSF, is not transformed in the bank, against the wishes of France, a majority of countries in the euro area and G20 members who saw an easy way to increase its firepower.

Chancellor Angela Merkel ended the discussion at a joint press conference with Nicolas Sarkozy, saying that the finance ministers of the euro area were working on two models to strengthen the capacity of the European Financial Stability Fund (EFSF).

"The two do not include the European Central Bank because the treaties do not allow it," she said.

Nicolas Sarkozy for his part said that France "is as much" the independence of the ECB as Germany and he returned not to the Heads of State and Government instruct the guarantor of stability of the euro.

France is still defended publicly on the eve of the weekend to grant a banking license in EFSF, which would have the advantage of giving unlimited access to liquidity from the ECB.

It could rely on the support of 14 of the 17 countries in the euro area, Italy, Spain and Belgium being advanced against a Germany that had only the Netherlands and Finland to its sides.

While the looming G20 summit in Cannes in early November, the United States, the major emerging countries and the International Monetary Fund (IMF) also grew in the wings for the firewall erected by Europeans to be the strongest possible and involve the institution in Frankfurt.

"The problem is not Greece, but installing an effective firewall to prevent contagion to the rest of the euro area," summarized a source close to the G20, which emphasizes the risks posed by European dithering on the global recovery.

"For this, we must size and speed (…) Only the ECB has the size and speed of action needed," the source said.

FAST ACTION

Another source said that if the French Minister of Economy, Baroin, suggested Friday night flexibility on this issue was first to open the door to possible trade-offs between different aspects of the response to crisis in which STRIPS Europeans.

Because if the Germans are opposed to the transformation of the European Financial Stability Fund (EFSF) in the bank and to leaving the ECB to become lender of last resort in Europe, the French refused to endorse them on the discount of 60% Berlin demanded that the Greek bonds.

Remains unknown: the position of the European Central Bank after Jean-Claude Trichet has left office, October 31.

The French are hostile to the evolution of double EFSF and the institution of Frankfurt but his successor, the Italian Mario Draghi, the current governor of the Bank of Italy and considered more pragmatic, there is not necessarily opposed.

"It is likely that Italy is on the side of France against the toughest positions defended by Germany and the Netherlands", do you confirm the Italian Treasury.

The arrival of the "pragmatic" Jörg Asmussen to the Board of the ECB to replace the "hawk" Jürgen Stark as the representative of Germany as well as a possible French digitally replacing Jean-Claude Trichet could also influence the position of guardian of the euro.

In the past, the ECB had similarly plot of "red lines", as its absolute refusal to buy government bonds markets or to consider a discount of Greek debt to be forced to abandon with worsening of the crisis.

Meanwhile, two solutions remain on the table to maximize the firepower of the EFSF: Germany and the ECB's call for a partial insurance mechanism sovereign debt of countries in the euro area.

The alternative would be to create a special vehicle powered by such banks as well as foreign sovereign wealth funds and resources which the Fund would be available to intervene in the secondary market.

Santander boosts equity capital with new partners in the United States

October 21, 2011

Spanish bank Santander announced Friday a strengthening of its balance sheet by about a billion dollars (730 million) by integrating new partners in its activities to consumer credit in the United States.

The announcement comes as pressure intensifies on European banks to increase their own funds.

In a document addressed to the regulators, the largest bank in the euro area states want to increase its capital by about $ 1.5 billion in Santander Consumer States.

The transaction values ​​Santander Consumer United States to four billion dollars, according to estimates by the bank.

Last month, its chief executive Alfredo Saenz was, however, said the bank did not plan to raise equity.

The consortium Sponsor Auto Finance Holdings Series subscribe to the capital increase up to a billion dollars and Dundon DFS up to $ 150 million.

Santander will retain a majority share of 65% in Santander Consumer United States after the operation, Sponsor Series Auto Finance Holdings will own 25% and 10% DFS Dundon.

The consumer credit in the United States is one of the most profitable activities of Santander, analysts said, and generated a net profit of $ 455 million in 2010.

Around 8:45 GMT, taking 2.73%, outperforming the IBEX simultaneously up 1.13%. The Stoxx Europe 600 bank and earned 2.02%.

Scholarships worried the Franco-German summit

October 20, 2011

European markets open in the red Thursday morning after the meeting between Nicolas Sarkozy and Angela Merkel. The Franco-German summit suggests that disagreements are still on the rescue of the euro area. Paris lost 1.6%. German Chancellor Angela Merkel and Nicolas Sarkozy at a European summit in Brussels June 24, 2011.

Concerns are growing stronger with the approach of the EU summit to be held this Sunday. Around 10 am, Paris lost 1.6%, London 1.3%, Frankfurt 1.5%. At the same time Milan fell by 1.8% and 1.3% in Madrid. The Nikkei of the Tokyo Stock Exchange finished Thursday's session lower by 1%, investors fear that the summit of the European Union this weekend does not solve the crisis in the eurozone.

These concerns were reinforced by the Wednesday night meeting between French President Nicolas Sarkozy and German Chancellor Angela Merkel.The two leaders met for nearly two hours in Frankfurt around the future of the euro area. Nothing filtered out of the interview but the discussions have included the lending capacity of EFSF, the relief fund in the euro area, which must be set up to help countries in trouble. According to the German press, Berlin would be in favor of strengthening the EFSF to 1.000 billion euros, but more like Paris. In addition, Nicolas Sarkozy wants to transform this new instrument in the bank, which refused Angela Merkel and Jean-Claude Trichet, President of the European Central Bank (ECB).

Rumors about the amount of its capacity should continue to circulate in the markets, which should make the stock markets volatile."As we approach the summit, nervousness increases and investors away from equity markets," said the note IG Market Analysis, adding that the latest results of companies from the United States are often disappointing and not conducive for optimism.

Moody's triple A threat of France

October 18, 2011

Moody's is given three months to determine whether his perspective "stable" on "AAA" tricolor is still justified. The rating agency said that financire the financial strength of the French government has weakened. The Minister of Economy and Finance Baroin presented Wednesday, September 28 in Council ministresle of the state budget for 2012.

The rating agency Moody's Investors Service gave the first Monday penknife to the sacrosanct "AAA" rating of France, announcing that it gave three months to determine whether his perspective "stable" was still justified in view of the deteriorating economic situation."Over the next three months, Moody's will monitor and evaluate the stable outlook (the note of the country) in the light of progress made by the government to implement" the measures announced to reduce the budget deficit, said the agency rating in a statement.

France has currently the highest rating possible from Moody's (a "Aaa"), as from its main rival Standard & Poor's and Fitch Ratings. This high rating allows it to borrow on the markets in very favorable terms to finance its budget deficits. If the prospect of this note should be revised to "negative", this would imply that Moody's would likely reduce the medium-term (usually for a term of three to twelve months).And France would become the new big country, after the United States to lose the precious talisman financially.

The agency is careful to note that this review is part of its annual study on the accounts of France and that it is not – at this stage – a decision on the note country. But it is the first of three major rating agencies and to cast a shadow on the "Aaa" French. Last week, Moody's had yet to confirm the strength of the French note, after the announcement of the restructuring of the bank Dexia.

Keeping the promise of deficit reduction

In addition to the ability of the French government to meet its budget commitments, Moody's says it will consider in its deliberations "new negative developments in the economy or financial markets."In its statement, Moody's notes that the financial strength of the French government, although still very high, "has weakened, as is the case for other countries in the euro area, as the economic and financial crisis in the world has led to a deterioration in its debt ratios, which are now among the lowest rated countries Aaa + + ".

For Moody's, so it is "crucial" for France to maintain "investor confidence in its ability and willingness to deal with unforeseen challenges."Or "France could face a number of challenges in the coming months – such as the need for additional support to other European countries or its own banking system, which could increase so significant commitments that must support the country's budget, "said Moody's.

"The deterioration of debt ratios and the ability to see new potential liabilities are putting pressure on the prospect of stable rating Aaa + + of the country," said the agency. For Moody's, the French government now less room for maneuver in 2008 (…) "during the crisis of" subprime "." The continued commitment to implement economic reform measures and budgetary and visible progress in the goals "for reducing debt" will be important for maintaining the stable outlook "of the note of the country, the agency warns.

Trichet the ECB brought out of its frame, according to a survey

October 17, 2011

Jean-Claude Trichet has exceeded the mandate of the European Central Bank (ECB) in its efforts to stem the debt crisis in the euro area, as more than half of bank employees asked about the eight years of his presidency the ECB.

Just under half of the 1200 ECB employees were surveyed by the union of the ECB ipso to evaluate the performance of Jean-Claude Trichet, who was replaced on November 1 by Mario Draghi.

Over 70% of respondents felt that Jean-Claude Trichet has enhanced the reputation of the ECB, 75% reporting as well as its communication regarding the bank's policy was clear and consistent.

That said, 55% think that Jean-Claude Trichet did leave the ECB's framework defined by its mandate actions – repurchase of government bonds in mind – to fight against the debt crisis.

At the same time, it also emerges a majority that the decisions made by Jean-Claude Trichet were good under the circumstances.

The ECB has set up its program – still ongoing – Redemption of debt securities issued by sovereign countries in the euro area in May 2010, at the cost of deep divisions within the bank that resulted in the resignation of his two German members, Axel Weber and Juergen Stark, this year.

Unlike the Federal Reserve, whose mission is to support as much growth as the fight against inflation, the mandate of the ECB is solely focused on the stability of consumer prices.

But with the arrival of a new president and the apparent support of the staff of the ECB's anti-crisis measures taken by Jean-Claude Trichet, a debate on enlargement of the prerogatives of the ECB could open.

The outgoing president of the ECB declined to respond to the survey results ipso.

Are you for a return to the franc?

October 15, 2011

Four in ten French people consider the euro as a disability and wish to return to the franc. Do you share that view? Four out of 10 French are for an abandonment of the euro and a return to the franc, according to a survey conducted from FIFG 23 to 26 September 2011

Four in ten French believe that "the euro has been quite a handicap over the last three years of financial and economic crisis," according to a survey conducted for the FIFG UMP and made public Friday. Only 26% of respondents believe the euro has been "an asset", against 40% who describe it as "handicap" and 34% for whom it was "neither one nor the other," according to the survey presented at the parliamentary days of the UMP.

In August 2010, only 34% of French people saw the euro as a handicap, according to a survey conducted then FIFG for Humanity.Similarly, 37% of respondents wish that "France gives up the euro and the franc back," against 63% for the maintenance of the euro. Last June, in another survey FIFG-L'Humanité, only 29% were in favor abandonment of the single currency.

The French are divided into two camps face almost equivalent to European integration, "given the current crisis", 51% are for "a strengthened European integration with a unique economic and fiscal policy", against 48% preferring "less European integration and economic and fiscal policies of each State "(1% undecided).

Do you agree with these opinions? Do you think the single European currency is an asset or a liability in times of crisis? A return to the franc is it possible and desirable? Give us your opinion in the comments.

Survey conducted by telephone Sept. 23 to 26 among a sample of 964 individuals, representative of the French adult population for the UMP group in the National Assembly, Senate and Parliament.

Shale gas: the repeal of three licenses is formalized

October 13, 2011

An order of revocation was published in the Official Gazette on Thursday. It provides for removal of three licenses for shale gas of 64 in the south of France. A manifestation of anti-shale gas in the National Assembly, 10 May 2011.

The order of revocation of three licenses for shale gas from Total and the U.S. Schuepbach in the south of France was published in the Official Gazette Thursday, confirming the government's announcement on 3 October. The three exclusive licenses for oil exploration so-called "Montelimar" (Total) "haves" and "Villeneuve de Berg" (Schuepach), which had been granted in March 2010, are repealed, according to the decree of the Ministry of Economy, Finance and Industry.

These three licenses cover an area of ​​9,672 km square in seven departments in the south of France, Ardeche, Drome, Vaucluse, Gard, Hérault, Aveyron and Lozère, where they raised a strong mobilization of opponents. The government announced on October 3 the repeal of the three licenses, which he said are the only ones among the 64 research permits oil and gas in France to cover only those shale gas. These repeals are consequential to the enactment of legislation in July banning the controversial technique of hydraulic fracturing used to extract the shale gas, making France the first country to prohibit.

Total expressed its "surprise" at the announcement of the loss of his license, explicitly pointing out that he had engaged in a report to the Department to comply with the law and not to use fracturing.The group, which was waiting for an explanation, has not yet decided whether to make an appeal. In a letter dated Wednesday to head the European shale gas in total, of which AFP has had a copy, the Department of Energy Department estimates that the French oil giant did not "sufficiently explained" the alternative technologies which he intended to use.

"I see you does not adequately explain the alternative technologies that you plan to use as part of an exploration of the potential of shale gas area, thus the government, contrary to the will of the legislature unable to appreciate the reality of your commitment not to use the technique of hydraulic fracturing, "wrote the director. Questioned by AFP, Total declined to comment immediately.In an opinion dated October 10th that the AFP has consulted the General Council of Industry, Energy and Technology (CGIET) estimates that the total license can not be repealed unless it is established that his report was "insufficient in view of the accuracy requirements of the legislature" on the techniques used.

The Texas Schuepbach, in his report, he had said he intended to continue to use hydraulic fracturing, in Bercy, which had automatically excluded. The remaining 61 exploration licenses have been validated them. After the U.S. has waived Toreador Oil shale east of Paris, only eight are for non-conventional hydrocarbons (coal gas), but their owners have all given up fracturing.

The Tokyo Stock Exchange ended down 0.4%

October 12, 2011

The Tokyo Stock Exchange to a halt Wednesday, after three sessions of gains, the disappointing results of the U.S. Alcoa raising fears a negative impact of the debt crisis in the euro zone on third quarter results.

The Nikkei lost 0.4%, or 34.78 points to 8738.90 points and the Topix, larger yielded 1.56 point (0.21%) to 753.44 points.

Certain values, including Honda Motor (-2.22%), suffered greater losses, affected by the damage to their plants by flooding in Thailand.

Although investors have bought futures contracts, as well as neglected sectors recently, investors are not convinced that European leaders will address the concerns about the financial system through the measures promised by the end of the month.

"The question of how Europe will recapitalize banks remains," said Tetsuro Ii, CEO of Commons Asset Management.

The results below expectations Alcoa, attributed to slower growth, weighed on the trend.

"Those who wanted to be reassured by the U.S. results are for expenses," said Kenichi Hirano, a director at Tachibana Securities.