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ECONOMICS

Left slams call for Thatcher Street in Paris

A proposal to name a street in the French capital after the late Margaret Thatcher has caused left wing members of the Paris council to see red. One suggested it would be more appropriate to name a rue after an IRA hunger striker.

Left slams call for Thatcher Street in Paris
Photo: AFP

Left-wing politicians on Paris city council have slammed a proposal to name a street in the French capital after Margaret Thatcher, suggesting instead that one be named after IRA hunger striker Bobby Sands.

City councillor Jerome Dubus of the right-wing UMP party has said he will propose naming a street after Thatcher, the Conservative former British prime minister who died on Monday, at an upcoming city council meeting.

But councillor Ian Brossat, of the Communist-backed Left Front, denounced the move and said the city would do better to honour Sands, the Northern Irish prisoner who died in a 1981 hunger strike while Thatcher was in office.

"The cynicism of the Parisian right knows no bounds," Brossat said. "Jerome Dubus's proposal is a joke."

Describing Thatcher as the "apostle of British ultra-liberalism, who left an appalling legacy for the state and the working classes", Brossat said it would be better to name a street after Sands, who he said Thatcher "allowed to die of hunger with other prisoners."

Several French cities already have a Rue Bobby Sands.

See also: 'Why France needs a dose of Thatcherism'

Since Thatcher's death those on the French left have been critical of the former British PM.

After Thatcher's death far-left firebrand Jean-Luc Melenchon, renowned for being outspoken, took to Twitter to deliver his own “homage” to the leader of three consecutive Conservative governments.

“Margaret Thatcher will find out in hell, exactly what she did to the miners,” Melenchon tweeted.

Given the role Thatcher played in undermining the power of Britain’s trade unions, their counterparts in France were critical of the former Tory chief.

“The Iron Lady did everything she could to break the expression and the fight of the British labour movement,” said Marc Blondel former secretary general of CGT-FO union. “She wanted to pacify the union movement but in doing so undermined democracy in her country.”

There was also a mixed reaction from France's former Prime Minister Pierre Mauroy, who served under President François Mitterrand in the early 1980s.

Former Socialist Prime Minister Pierre Mauroy, who in 1982 helped persuade his British counterpart to agree to the building of the Channel Tunnel, described Thatcher as a “formidable opponent”.

“She was a great British Prime Minister despite being conservative even reactionary,” Mauroy said, according to L’Express magazine.

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PROPERTY

Swedes have not been this pessimistic about house prices since 2008

House price optimism has taken a nosedive, according to the latest indicator report from Sweden's SEB bank. Sentiment among Swedes is now the most negative it has been since the 2008 financial crisis. What's going on?

Swedes have not been this pessimistic about house prices since 2008

How pessimistic are Swedish households? 

Very.

Households’ expectations for housing prices have fallen sharply this month, with SEB’s indicator dropping eleven percentage points in July, from -16 to -27, the lowest level it has hit since the financial crisis in 2008. 

The indicator, which has historically been a reliable predictor of house prices, turned negative in June for the first time since the pandemic hit in April 2020. 

The indicator is calculated by subtracting of the percentage of respondents who think house prices will fall from the percentage who think they will rise.

In July, the proportion of households surveyed who expected rising prices fell to 24 percent, down from 31 percent in June, while the proportion expecting falling prices rose to 51 percent from 47 percent. 

What is the reason for households’ pessimism? 

Américo Fernández, SEB’s private economist, told The Local that households in Sweden had reacted strongly to the decision of Sweden’s Riksbank central bank to hike rates, with most believing that the base interest rate would rise to 1.10 percent within a year.  At the same time, he said, households understood that inflation would reduce household spending power, making it harder for people to service large mortgages. 

“The result is not that surprising since inflation is on its highest levels since early 1990s and interest rates are increasing rapidly,” he told The Local. “These joint factors make it much more difficult for households to consume at the same high levels, meaning that they have decrease some of their consumption, and new mortgages and houses will be on that list.”.

He said it remained to be seen whether expectations improve again rapidly, as they did at the time of the pandemic, or would remain low. 

“Now the question is if this decline in expectations will turn around rapidly like during early pandemic (march/April 2020) or if it will continue in a negative slope like in the financial crisis of 2008.”

How badly has consumers’ spending power been hit by rate rises in Sweden? 

According to Christina Nyman, chief economist at Handelsbanken, a major Swedish bank, rising interest rates are already weighing on consumers’ buying power.

“For a household with loans of SEK 3m, this translates to additional costs of SEK 3,300 per month, which we believe is putting a cap on other consumption,” she said of the Riksbank’s rate increases so far. 

She warns in the bank’s most recent Global Macro Forecast that if the Riksbank speeds up its rate hikes, it could lead to a proper recession in Sweden.

“An acceleration of the rate-hike program could result in a drop in housing prices and a more severe recession,” she said.

Are we going to see a housing crash?

To qualify as a housing crash, home prices need to plummet by at least 15%, something which has not happened in Sweden since the 2008 financial crisis when prices in Sweden fell by as much as 20%, before rebounding gradually over the following years.

So far, it looks more like house prices in Sweden are set to decline more gradually, as there has been no new shock such as a stockmarket crash or banking crisis. 

How are homeowners responding? 

According to SEB’s report, 12 percent of households who currently have a fluctuating rate mortgage said in July that they are now planning to move to a fixed rate mortgage to avoid being hit by further rate hikes from the Riksbank, an increase of one percentage point from the June survey. 

The proportion who say they have already fixed the rate on their mortgage has risen by four percentage points to 37%. 

How might the average person be impacted?

Future buyers will profit from a drop in prices, despite all the suffering that frequently precedes a property catastrophe. On the other hand, the crash could be catastrophic for homeowners because they might have to sell their homes for less than what they paid.

Families who are forced to sell because they cannot afford their mortgage payments, for instance, or those who experience unemployment or illness, may therefore suffer significant capital losses.

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