The France country-specific exchange traded fund is gaining ground after French President Francois Hollande overhauled his cabinet, emphasizing economic reforms
The iShares MSCI France ETF (NYSEArca: EWQ) was up 0.5% Wednesday and increased 1.7% over the past week. However, the fund is still down 0.8% year-to-date.
Emmanuel Macron, Hollande’s former economic adviser and a former Rothschild & Cie. banker, took over as the new Finance Minister, Bloomberg reports.
“I want to restore the confidence of our partners, of foreign investors, as well as the confidence of France itself,” Macron said in the article.
Hollande reshuffled his cabinet after three ministers voiced dissenting opinions over the austerity measure and how they were affecting the economy. The administration is trying to revitalize a stagnate economy through pro-market reforms while adhering to Eurozone pressure to cut the budget deficit.
“We must create wealth and we must cut our deficits,” Prime Minister Manuel Valls said. “France has been living beyond its means for 40 years.”
Macron is charged with creating major reforms including taxes on labor and the so-called Responsibility Pact to reduce state spending.
The government is re-working its budget-deficit targets after the economy revealed no growth over the first and second quarters. Additionally, recent economic data revealed that the French manufacturing confidence declined to its lowest in 13 months in August. [Stagnate Growth Has Europe ETFs Lagging]
Some observers now believe that the cabinet will have more wiggle room for fiscal expenditures.
The timing of the cabinet overhaul “is interesting, to some extent surprisingly, it’s precisely when Europe is probably more accepting of fiscal relaxation,” Gilles Moec, chief European economist at Deutsche Bank AG, said in the article. “But this relaxation is acceptable only if structural reforms come through.”
iShares MSCI France ETF
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