The Sick Man Of Europe Is France, In Every Sense

Leader of French far right party National Front, Marine Le Pen
Leader of French far right party National Front, Marine Le Pen
Laurent Joffrin

PARIS — France, the sick man of Europe… Until now, we have been using this old phrase as a provocative way to characterize this country's current economic situation.

But after the results of Sunday's European elections, this phrase now can be used to refer to something broken in French politics. With the victory of the far-right National Front party, the nationalist wave that has hit the continent finds in our country its most aggressive expression.

What kind of party topped the polls in this national election? It is a party that is anti-European, anti-immigration and committed to restoring the death penalty. It is also a party that wants to tear up the agreements on the right of asylum, to reject the Schengen agreements on the free movement of people, and to close the borders.

This significant event stains France's reputation in the world. It also sheds a harsh light on the health of our society.

Engage with people, not markets

The root causes of this break have been known for a long time.

This is a Europe that is a distant, disembodied structure doomed to austerity, and the endless economic crisis underlines year after year the powerlessness of the politicians.

The ruling class lost itself in unbridled financial markets, and seems unable to understand that the globalization that it takes advantages of is actually destroying the markers and protections the peoples believed they could count on.

France's center-left leadership needed two years to finally choose the reform to implement, and it is now paying the price of its indecision.

It was a terrible shock. But, in the long run, will it be salutary?

Of course, the responsibility lies primarily with those in charge. Europe must react by conducting a policy that engages with the people of its member nations, rather than the markets. The government in France must work continuously on the reforms it promised and at the same time spare the working class as much as possible.

With both words and action, President François Hollande must embody this difficult path and explain why the efforts he is asking are necessary.

The French ruling class must finally regain a sense of civic responsibility, to revive the economy that remains mired in stagnation and rediscover an air of patriotism. Some will say it is a lot to ask for. But without these radical changes, support for the National Front is only bound to increase.

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Debt Trap: Why South Korean Economics Explains Squid Game

Crunching the numbers of South Korea's personal and household debt offers a glimpse into what drives the win-or-die plot of the Netflix hit produced in the Asian country.

In the Netflix series, losers of the game face death

Yip Wing Sum


SEOUL — The South Korean series Squid Game has become the most viewed series on Netflix, watched by over 111 million viewers and counting. It has also generated a wave of debate online and off about its provocative message about contemporary life.

The plot follows the story of a desperate man in debt, who receives a mysterious invitation to play a game in which the contestants gamble their lives on six childhood games, with the winner awarded a prize of 45.6 billion won ($38 million)... while the losers face death.

It's a plot that many have noted is not quite as surreal as it sounds, a reflection of the reality of Korean society today mired in personal debt.

Seoul housing prices top London and New York

In the polished streets of downtown Seoul, one sees endless cards and coupons advertising loans scattered on the ground. Since the outbreak of the pandemic, as the demand for loans in South Korea has exploded, lax lending policies have led to a rapid increase in personal debt.

According to the South Korean Central Bank's "Monetary Credit Policy Report," household debt reached 105% of GDP in the first quarter of this year, equivalent to approximately $1.5 trillion at the end of March, with a major share tied up in home mortgages.

Average home loans are equivalent to 270% of annual income.

One reason behind the debts is the soaring housing prices. In Seoul, home to nearly half of the country's population, housing prices are now among the highest in the world. The price to income ratio (PIR), which weighs the average price of a home to the average annual household income, is 12.04 in Seoul, compared to 8.4 in San Francisco, 8.2 in London and 5.4 in New York.

According to the Korea Real Estate Commission, 42.1% of all home purchases in January 2021 were by young Koreans in their 20s and 30s. For those in their 30s, the average amount borrowed is equivalent to 270% of their annual income.

Playing the stock market

At the same time, the South Korean stock market is booming. The increased demand to buy stocks has led to an increase in other loans such as credit. The ratio for Korean shareholders conducting credit financing, i.e. borrowing from securities companies to secure stock holdings, had reached 21.4 trillion won ($17.7 billion), further increasing the indebtedness of households.

A 30-year-old Seoul office worker who bought stocks through various forms of borrowing was interviewed by Reuters this year, and said he was "very foolish not to take advantage of the rebound."

In addition to his 100 million won ($84,000) overdraft account, he also took out a 100 million won loan against his house in Seoul, and a 50 million won stock pledge. All of these demands on the stock market have further exacerbated the problem of household debt.

42.1% of all home purchases in January 2021 were by young Koreans in their 20s and 30s

Simon Shin/SOPA Images/ZUMA

Game of survival

In response to the accumulating financial risks, the Bank of Korea has restricted the release of loans and has announced its first interest rate hike in three years at the end of August.

But experts believe that even if banks cut loans or raise interest rates, those who need money will look for other ways to borrow, often turning to more costly institutions and mechanisms.

This all risks leading to what one can call a "debt trap," one loan piling on top of another. That brings us back to the plot of Squid Game, "Either you live or I do." South Korean society has turned into a game of survival.

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