What's going on?

The International Monetary Fund (IMF), a major global financial organization, has given a big thumbs up to the new French president�s economic reform plans.

What does this mean?

As the IMF points out, France�s economic growth has underperformed the rest of the eurozone every year since 2013, and it has an unemployment rate that is double that of the US, UK and Germany.


President Macron was elected a few months ago on a platform that called for substantial economic reforms in France. His government aims to overhaul the country�s onerous labor laws, reduce corporate taxes and introduce tax breaks for entrepreneurs (among other things). The IMF says such efforts will make France�s economy more dynamic and that Macron�s election is a unique political opportunity to make it happen.

Why should I care?

The bigger picture: Many say that other European countries would benefit from similar reforms.

The President of the European Central Bank, among many others, has been pushing for such reforms to take place in France as well as in other eurozone countries, particularly large economies like Spain and Italy. While eurozone growth has picked up over the past year or so, the region has significantly underperformed countries like the US and UK since the financial crisis � and many economists argue that structural problems, like labor laws and heavy regulations, are a big part of the problem.


For markets: Politics has gone from a threat to a positive catalyst in Europe.

At the beginning of the year, investors were worried about upcoming potential political minefields in Europe � and the French election was a particular worry. But they have been heartened by the victory of �establishment� candidates that are, on the whole, viewed as business-friendly. As political risks have receded, European stocks and the value of the euro have increased, performing better than most other major markets so far this year (remember, international investors have to buy the euro in order to invest in Europe).