Germany and France

The Merry Sisters

by Macro D

My distrust of Germany and France has distant roots, but let's stay in 2025. This year began with corporate failures in both countries, the first since the 2009 financial crisis. In Germany, we have witnessed a repeated state of crisis in the manufacturing industry due essentially to 1) a failure to transition to electric vehicles, 2) a crisis in the automotive sector, and 3) a reduction in demand. France has not fared any better, and here, the sectors most affected have been construction and real estate, given the chronic state of the French banking sector, which has never fully embraced certain financial instruments, such as derivatives, that are still hidden on their balance sheets.

Suppose Germany has recently managed to freshen up its image, with a government intent on marking an essential change of pace. In that case, the same cannot be said of France, which is still forced to suffer the demands of a President who continues to manoeuvre Paris and its surroundings by pulling governments of convenience out of a hat, without head or tail, with the sole aim of safeguarding his power.

Let's stick to the facts. At the beginning of the year, the yields of the 10-year French government bond were higher than those of the Greek equivalent, while in Germany, the table was being set for the funeral of the bund as a symbol of solidity and unassailable pragmatism. What has changed since then?

Let’s explore …