The main sponsor of Top Marques, the Edmond de Rothschild Group, has been very much involved on a daily basis in the supercar and luxury show, which closed on Sunday after four successful days at the Grimaldi Forum.
At a press conference with invited journalists on Friday, the Group’s Chief Economist, Mathilde Lemoine, shared a number of her insights into the current economic situation, with particular emphasis on the need for government borrowing.
The French presidential election could produce a cash crisis after the first round,” she said. “We have to understand that France needs cash to operate,” she said. “We have to understand, before analysing specific policies, that France needs external financing.”
Without mincing her words, Ms Lemoine said that France has gained monetary stability through the European Union. Before, France had to follow Germany without question. Now, through the medium of the European Central Bank (ECB), France has a say in policy decisions.
She added that a number of French banks may run into trouble in the present uncertain climate and much would depend on how much help would come from the ECB.
Turning to the UK, Ms Lemoine said that the UK election, as recently announced by the British prime minister, could encourage the idea of a soft Brexit and so reduce pressure on the value of the pound in the short term. However, the Group believes that there will be a dip in the value of sterling of about 10 percent by the end of the Brexit process, she said.
A common theme running through Ms Lemoine’s analyses is the need for governments to borrow from the financial markets, and the challenges this poses.