France economy stumbling. IMF warns it may fall behind Italy and Spain.
Within a day, France was hit with two separate reports criticizing its economy and labour market. The IMF and Gallois report both stressed that France was losing economic competitiveness due to high employment costs. France has traditionally been the second largest economy in the Eurozone behind Germany. In the recent years France’s economy has fallen further and further behind Germany’s and is in danger to fall behind the economies of Spain and Italy as well as they embrace economic reforms. Frances faltering economy has been attributed to high wages(France’s average wage is over 10% higher than Germany’s), high government spending (highest spending in terms of % of GDP in Europe), and early retirement. The Gallois report contained 22 recommendations. The biggest was cutting 30 billion dollars of social contributions from employers and employees. The IMF report recommended that France should change employment laws to make it easier to hire and fire employees, lower minimum wages, and reduce payroll taxes. The IMF warned that France needs to act soon or they will fall behind Spain and Italy.
Puerto Rico may become the 51st State
Puerto Rico voters casted their ballots last week on a referendum where they decided that they want to become the United State’s 51st state. The ballot contained two questions. The first was whether Puerto Rico should change it’s status; 54% voted in favour of the change. The second question asked if it should be changed to statehood, sovereign free association, or independence. In the second question 61% favoured statehood, 33% sovereign free association, and 6% independence. There were also about 500,000 voters who voted on the first question but did not vote on the second one which could mean that a large portion of people want to change Puerto Rico’s status but are undecided as to what that status should be. Puerto Rico was obtained by the US in the Spanish-American war in 1898. Puerto Ricans are US citizens and have US passports and pay most federal taxes and contribute $3.5 billion to the federal reserve annually. However, they get less benefits than the States, they cannot vote in elections, and don’t have Senate delegates. Puerto Rico also has a higher unemployment rate and a higher murder rate than any other state. Barack Obama pledged to move forward with whatever outcome the referendum had. If Obama keeps his word, then Congress should be working on adding a 51st State to America soon.
GOP Ready to Make Concessions on Taxes, Immigration
After Mitt Romney’s disappointing election loss to incumbent Democrat President Barack Obama, the aftermath leaves the Republican party facing difficult choices for its future. As voices nationwide call for reform and progress, there is no doubt that influential Tea Party backers and traditional Evangelical support will try to impede change at every turn. However, recent statements from powerful Conservative pundits, including Ben Stein, Sean Hannity and Charles Krauthammer have shown promise. Each of these voices have admitted shifting attitudes towards illegal immigrants who have taken roots in America, stating they were willing to consider amnesty if based upon a stringent set of standards. These ‘shifting attitudes’ can likely be attributed to dismal Hispanic support for Republicans in last week’s election. Whether these voices will push for change in Washington remains to be seen, however, some heavy-hitting Republicans in the Congress and the Senate have finally conceded on one of America’s most sensitive topics: taxes. Leading this concession is House Speaker and Republican John Boehner, who states that Republicans are open to higher taxes based on the right circumstances to avoid the upcoming ‘fiscal cliff’ in January, when $800 billion in spending cuts will take place and the Bush-era tax cuts will expire.
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