Snow and ice hits South-West France
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Life in France in 2009 and onwards

Cosmos flowers near bergeracI know that there is a growing feeling that the love affair with France has died now that the credit crunch and the strong Euro has put pay to cheap holidays and cheap French houses.

My personal view is (and this is not intended as any kind of advice) that France will be a secure bet for living and buying a property in the coming eighteen months.

New pay as you go legislation that comes into force this month will help to stimulate France's small enterprise market.

I feel we will see thousands of ex-pats, who until now have been working on the 'black' and avoiding their social security and tax responsibilities because of the fear of paying much more than they can expect to earn - especially in the start-up phase when getting established is extremely difficult.

I will take a while to sort itself out but I am positive that many more people will go 'legal' and start paying into the French system. It will help France with their national debt burden, create liquidity in the system (although there is nothing more liquid than cash).

The new scheme, called l'auto-entrepreneur system will mean that a new business will only pay social charges (or Cotistations) and Tax as it is earned.

As far as housing is concerned; I am convinced that France is going through the kind of changes that the UK tackled twenty five to thirty years ago.

Getting a mortgage is harder here and the banks are much stricter on the way they lend to people. This in-turn has kept the house prices pegged amongst the French housing market to levels that are within the finance budgets of the average French family.

There is a second tier market that is out of kilter with the underlying French housing market which has been fuelled by speculation and investment by foreign money. This market is falling rapidly and is closer to the underlying market than it has been for a long time.

I feel that we are going to see an alignment of these polarised markets in the next year to eighteen months which means that the market will rise as a whole.

The young French are breaking free a little more and have been influenced to a degree by the influx of English, Dutch and Germans. Playstation, mobile phones, nice cars and homes are becoming more important and this materialism will I feel have an impact.

This materialism does not sit well with the current French demography but change is inevitable. I do not see massive spikes in house values but I see security in them.

I have a view that the Euro will start to fall back - as I write this, the rate is £1 = 1.09 - to the £1 = 1.25 Euro by June and I really do feel that the Euro-zone getting disenchanted with the single currency.

At present, I am sure that there is a smugness amongst those counties that have subscribed to the Euro looking down at the weak pound and the UK and feeling as though it has brought down a super-power to a humble equal.

The biggest challenge to Europe is holding the pound at these levels and if they cannot hold on tight enough then I feel a breakdown in the system is possible.

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