Vive la France!

S&P, mustering, as Shakespeare had it, 'a foul and pestilent congregation of vapours' now appears to be threatening to downgrade France's credit rating as well.  Paul Krugman appears to take issue with this in a recent blog post, and rightfully so.  The French economy weathered the storm of the financial crisis well, showing modest growth, retaining jobs and organized labour has prevented the Sarkozy government from imposing serious austerity measures.  The European Central Bank has done a great deal to assist the struggling Italian economy in a move to help stabilize the Euro. Certainly, France has not balanced it's budget, but this is because it is doing the sensible thing in times of recession by continuing social spending and thus insuring that money continues to move through the economy.

This said, it would appear that S & P decision is largely ideological.  Has S & P drunk deeply of the Tea Party ideology and is now consumed by the notion of demanding deficits be balanced?  I think the French economy is one of the safer economies to bank on.  Admittedly, there are several features holding the French economy back, but it is not as though France is pursuing policies that result in undue risk. It should also be noted that many of France's problems are more circumstantial than structural. All in all, S & Ps rumored considerations remain somewhat baffling.