This month the transportation and energy union workers went on strike in France, making many across the globe wonder about the future of the country and its related exchange traded fund (ETF). The strike was a test for the political future of President Nicolas Sarkozy and his ability to bring about economic reform, reports Investor’s Business Daily. It looks like Sarkozy won this round and he vows to move ahead with reforms.
The French economy is in economic trouble based on excessive government and union influence in the private sector. France’s population is also rapidly aging and workers are retiring at younger ages. Since 2000, France’s GDP has grown 1.7% a year after inflation; compared to 2.1% for the rest of the EU and 2.4% in the U.S.
With this political win for Sarkozy, his leadership should help bring about reform and help put France into a better economic situation. As the country moves forward, the iShares MSCI France (EWQ), which is up 12.5% year-to-date, should benefit.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.