The political, human and diplomatic crisis should not be compounded by an economic crisis. Interviewed on Sud Radio on Monday morning, the French Minister of Economy and Finance returned to the attacks that hit Israel this weekend. Seeking to be reassuring, Bruno Le Maire said he expected "limited" consequences of the conflict on activity and the economy.
While the price of a barrel of Brent crude jumped on Monday morning, exceeding the $87 mark, compared to $84 last week, this increase remains "limited", below the 5% mark, the head of Bercy noted. In addition, prices were gradually falling in the morning. "I think that the consequences of the conflict should be limited, economically," provided that a "regional conflagration" is avoided, Bruno Le Maire told Sud Radio. "What is critical for markets is whether the conflict remains contained or spreads to other regions, particularly Saudi Arabia," said Brian Martin and Daniel Hynes at ANZ.
The minister also defended the government's energy policy, believing that gradually weaning oneself off oil is also a way of protecting oneself from economic upheavals. "Accelerating the deployment of electric vehicles, green hydrogen, charging stations, is building our independence for the decades to come," he said.
A minor business partner
However, this new crisis is likely to increase the volatility of oil prices, at a time when uncertainties are multiplying. Inflation, slowdown in China, real estate crisis, OPEC announcements, production cuts by some players... Mixed signals have pushed the curve up and down in recent weeks, a situation that has caused a stir among investors.
Apart from oil, the expected consequences are likely to remain minor, if the conflict remains focused on the Jewish state. Israel is, in particular, a minor trading partner for France, which exported 2022.2 billion euros in 1 and imported 1.5 billion euros, leading to a surplus balance for France, according to the General Directorate of the Treasury. Paris mainly sells "chemicals, perfumes and cosmetics", "transport equipment" and "agri-food products". Several French companies, including Alstom, have been able to sign major contracts with this partner, for a total of about "1.1 billion euros" in eighteen months, according to the treasury.