Comments from Peter:

... I agree about the local rates which are unregulated- many are complaining about the steep increases that have occurred in the past few years- perhaps to cover the councils cost of conforming to new regulations associated with EU. More probably it is because they(the government) cant balance the books properly and are increasingly trying to find extra ways to pass costs on to the local councils eg the new education reforms which will shift the burden somewhat to local gov't.

I cant help feeling a little uneasy about France’s future. When you take into account the cost of doing business in France, it is hard to see them growing economically at sufficient rates to cover their growing deficit and yet they are meant to be embarking on all these EU reforms. Somethings got to give: Taxes cant keep going up, their welfare system does not encourage work and every time they try to change things(reduce costs) the whole country goes out on strike! They seem to be living in a dream world thinking they can have the best of everything. I shudder to think how France would be economically without being a fabulous tourist destination. But even that market is being lost to places such as Spain and the opening up of Eastern Europe. The EU are patting themselves on the back that the Euro is so strong at the moment thinking that it is a sign of strength and good management yet it really is a sign that the US dollar is giving back the gains that it made in the late 90's. The trigger for that of course has been the slowing of US growth and their Currrent account deficits. exactly where France is heading. Trouble is when the Euro weakens again it will bring in all this inflation with the cost of imports increasing, and the EU who are paranoid about inflation will put up interest rates again, further depressing economic growth.

The writing is on the wall for France as a welfare state and yet their population has not been prepared for this change- many will be unable to cope when benefits are inevitably cut.

Australia are going through this argument now. At least Australia has started -The 9% superannuation levy on employment is starting to pay dividends with huge fund flows going into Super Funds helping to reduce our reliance on overseas investors for the funding of our private sector debt. The Federal Government debt is set to be non existent once the proceeds of the sale of Telstra goes ahead- which it will now do due to the powerful mandate that was given to the Liberal Gov't following the recent election. Australia went through its economic pain 10 years ago and are reaping the benefits now. France on the other hand is still trying to decide whether there is a problem....

Cheers

Peter