Effects of credit crunch/policy within the last ten years on political economy decisions in two countries: the UK and France.

Introduction:

The UK and France are two leading Western European countries having the fifth ($2.9 trillion) and sixth ($2.8 trillion) largest economies respectively. They are both apart of the European Union in which France was a founding member with the UK later joining in 1973. It presently gives them the opportunity to have a single market with all twenty-eight-member states. But their similarities do not stop there with both countries sharing similar statistics in population (UK – 64.1m, France – 66.3m) as well as a similar labour force of around 30 million. However, there are several major differences between the two countries including the currencies they use; France adopted the euro in 1999 whilst the UK opted out of the Maastricht Treaty retaining the British Pound. But the most interesting difference is the way each country handles their economic policy in such contrasting fashion. This paper looks to show which policies were implemented by each government and the economic theories behind them.

Political Economy Comparison:

1) State Ownership
UK
* The David Cameron administration since 2010 has been fast to privatise and sell off state owned companies. They have recently given an IPO to Royal Mail and are keen to sell other assets including its equity in URENCO. Furthermore, from early January ‘under a new Treasury scheme, members of the public and businesses will be allowed to buy Government land and buildings on the open market (See Reference 1).’ After bailing out Lloyds during the financial crisis the UK financial Investments has reduced its holdings to ‘12.97% as the government began selling of the 43% stake in September 2013 (See Reference 2)’, and a similar process is underway at RBS too.
France
*