Political impasse in France threatens domino effect of negative consequences
The political impasse in France is worrying Portuguese companies. Business Association (AEP) has told Jornal de Negócios that the crisis in France could negatively affect Portugal’s trade balance. Agriculture, manufacturing and tourism could be the sectors most affected.
The Portuguese Business Confederation (CIP) is also concerned about a possible contagion effect on the European economy, explain reports.
This is because France is the second destination for Portuguese exports.
According to Negócios, in 2023 the French economy bought goods worth more than €10 billion from Portuguese companies.
Tomorrow, the French government faces a motion of censure, officially tabled by the left but already supported by the 140 deputies of Marine Le Pen’s far-right party. A little like the dramas behind the state budget here in Portugal, political parties are working tactically to bring down an unpopular, minority government.
What could happen if the French government falls?
“A likely scenario will be an immediate reaction from the markets, with investors selling French government bonds, and a dramatic increase in the cost of financing this debt,” warns CIP in its interview with Jornal de Negócios.
The Portuguese Business Confederation emphasises that the European institutions would not be able to respond to a rupture in the French economy and that the consequences would “spread rapidly”.
The word no-one wants to use these days is ‘recession’, but it is the word that is hanging heavily on the horizon.
Source material: SIC Notícias
