France on Fire

 France is burning. What started as a student protest against dilapidated schools has turned into a nationwide round of rioting over the weekend. Instead of peaceful protest an alliance of far left and Islamist protestors (the red/green alliance) has laid waste to cities across France. (See: https://www.nytimes.com/2026/10/18/world/europe/france-protests-shock-arson.html - paywall) In Marseilles a pogrom against Jewish shopkeepers brought up memories of Nazi Germany’s 1938 Kristallnacht. Although I hate to say it, France is now paying the price for its unrestricted immigration policy.

 

Cheering on the protestors was France’s far left leader Jean-Luc Mélenchon who is in the running to be France’s next president. Of course, it wouldn’t be a protest without the anti-west Greta Thunberg showing up.

 

Almost two years ago we wrote that France was quickly becoming the new Greece of Europe. (See: https://shulmaven.blogspot.com/2024/12/2025-revenge-of-bond-vigilantes.html ) Simply put, France cannot afford to pay for its welfare state. Since then, France’s finances have deteriorated and the scenes of the collapse of public order will only make things worse. In all likelihood the French electorate will soon turn to Marine Le Pen, the doyenne of the far right to be its next president. She might be able to restore civic order, but her policies would only make France’s fiscal crisis worse.

 

However, unlike the Greek crisis of 2011, France is part of core Europe, and its fiscal problems could very well undermine the Eurozone. Although in the near term that would be dollar friendly, we shouldn’t forget that the fiscal order in the U.S. is far from perfect.