Germany's Economic Outlook Darkens as Pension Reform in France Faces Setback
The economic outlook in Germany has dimmed further, as indicated by the latest ZEW Institute sentiment index. Meanwhile, the pension reform in France faces a setback with the suspension of its key changes.
The ZEW Institute's sentiment index for Germany has taken a turn for the worse. Despite a slight uptick in October, the data had little impact on foreign exchange markets. Thomas Gitzel, chief economist of VP Bank, cautions that trade disputes between China and the US could darken the picture further. However, he also expects improved export expectations for Germany, hoping for a boost to the struggling export industry.
In France, French Prime Minister Sébastien Lecornu has suspended the pension reform, delaying the retirement age increase to 64 until at least January 2028. This move aligns with a key demand of the Socialist Party, whose support is crucial for the government's survival. The suspension comes as the euro is trading at 1.1582 dollars, up from 1.1561 at midday, and the dollar is trading at 0.8029 francs, down from 0.8038 at midday and 0.8028 in early trading. The euro-franc pair has remained steady around the 93 rappe mark at 0.9299 francs.
The economic sentiment in Germany continues to decline, with potential challenges on the horizon. Meanwhile, the suspension of the pension reform in France has significant political implications, as it addresses a key demand of the Socialist Party.
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