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In the dark days of the Global Financial Crisis, we would sometimes split the Eurozone into "beer" and "wine" drinkers. The northern beer drinkers, epitomised by Germany, were competitive, prudent, export driven economies, while the southern wine drinkers, epitomised by Italy, were indebted uncompetitive importers. The tricky part was always where to put France. We used to err on the side of the North, given the strong showing of French pharma and utility companies in the Fortune 500, the still strong industrial base, and the sheer size of the domestic market anchored by some of Europe's most dominant retail enterprises.
Spain, Portugal and Ireland have reformed and rebounded since 2011, while France has proved resistant to change and is in danger of slipping into the "wine drinker" category. The economy is stagnating, the President has the worst poll ratings in the history of the Fifth Republic, and real estate investors are increasingly cautious, resulting in weak investment volumes. The question is whether France will turn around its performance or be further eclipsed by other Eurozone members.
Source : CBRE Global Investors
