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Debunking 5 Myths About Frexit

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Debunking 5 Myths About Frexit

Bruegel,

5 min read
5 take-aways
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What's inside?

A French exit from the euro would bring a host of problems far greater than its benefits.

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8

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Recommendation

The harmful consequences of a French exit from the euro zone would likely overwhelm any purported benefits, according to economist Grégory Claeys, who claims “no exit” would be a more viable choice for France than Frexit. Claeys says that all stakeholders would stand to lose with Frexit, given the integration of France’s economy in the global financial system. While always politically neutral, getAbstract recommends Claeys’s note, written for the policy maker, economist or general reader with an advanced grounding in political economy, for its succinct yet well-articulated arguments.

Summary

The 2017 French presidential elections have fired up the debate on France’s place in the euro zone. Naysayers argue that a Frexit would be hassle-free and uncomplicated, support greater competitiveness among French companies, and permit unconstrained and independent monetary and fiscal policy. “Five myths” encapsulate pro-leave arguments:

  • “Myth 1: Frexit would unambiguously boost French competitiveness” – France is already competitive, with a trade deficit of only -1.3%. But a French departure from the euro zone could convince other members to leave. In that case, the new French franc could...

About the Author

Grégory Claeys is a research fellow at Bruegel, a European think tank.

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