14 The Euro Crisis


months, the ongoing debt crisis within the Eurozone. Understandably, this has caused many individuals to raise questions about their own position, and in particular with their investments.


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Here we won’t go into detail on what has caused the problems and what is being done to resolve them, as many column inches have already been devoted to these subjects. Instead what we aim to do is to discuss the questions we have most frequently been asked.


Is the Euro going to last? That depends on what you mean by “last”. If only for political reasons, it remains unlikely that the Euro will be dismantled, since Paris and Berlin would lose a significant amount of face if the Euro project collapsed. Moreover, it must be said that all the “troubles” related to the Euro have had little real affect on its value against other currencies.


However, if you mean will it last in its current form with 17 different fiscal policies and national interests pulling against each other, the answer is much more difficult to answer, and possibly no.


Germany is a shining beacon in the European economic landscape at the moment and the Germans are pretty fed up with picking up everybody else’s pieces. So, it is quite likely that we will see a “change in the rules” for the Euro with the Germans taking the lead.


Should we be getting out of Euros? The basic principle is that, if you live in France, your spending needs are in the currency of that country and, if you have your money in that currency, movements in exchange rates do not affect you.


Were the Euro to see significant changes your money will not disappear!


Whatever happens, France will still have to have a domestic currency, be it the Euro, the new French Franc or anything else. Therefore, if the Euro should wind up, a conversion would take place to change existing Euros into the new currency, just as the reverse occurred when the Franc was replaced by the Euro.


Whilst many blame the Euro for a general increase in prices, if a country switches from one currency to another, basic spending power in local currency is retained, so there is no reason why a French resident should move out of Euros.


Thus, any move to change your capital to another currency represents an investment risk, based on your conviction that the other currency will rise in value against the Euro (or its replacement). If you are looking to make a profit on the back of currency movements, you are happy with the risks involved and have the


lobal economic news seems to have been dominated by one subject over the last few


necessary market information at your fingertips; this can be a perfectly valid strategy and can be profitable; although you must be willing and able to take a reasonably high level of risk, since, as we have seen, currency markets can often be highly volatile.


However, it is more likely that people are asking the question, “should we be getting out of Euros” in fear of a complete collapse making their money worthless; which as noted above, is unlikely to occur.


Where a move out of the Euro into Pounds Sterling, for example, has been a valid strategy, is where you have definite plans to move back to the UK in the next couple of years. In that case, “locking in” the current exchange rate and therefore the gain that many of you have made since you have been here, is a sensible move, for your future budgeting.


Peter Wakelin is Regional Manager of Siddalls France, Independent Financial Advisers, specialising in tax, inheritance, pension and investment planning for the British community in France since 1996. Contact us on 05 56 34 75 51 for the name of your local advisor or visit us at www.siddalls.fr.


Marjorie Mansfield Siddalls Adviser in France


Siddalls advisers in France are there to provide support and up-to-date information on any issues that may affect your finances when living in France. They are able to explain and identify problems in a language you will understand, identifying any problem areas that need to be addressed and suggesting personalised solutions. Marjorie Mansfield is Regional Manager for the Midi Pyrenees and Languedoc Roussillon area. This is her story…


I have specialised in personal financial planning for France for more than 10 years with Siddalls. Two years ago whilst visiting clients in the South West of France, my partner, spotted a typical old farmhouse in the Gers. It was love at first sight for both of us: The house was surrounded by beautiful rolling countryside with fabulous views of the Pyrenees.


Of course, we then proceeded to put into practise all the advice on the financial implications of becoming French resident that I had been giving to clients in the UK for the previous 8 years. I realised that I was fortunate to be working for a company that is registered in both the UK and France and was soon able to arrange a transfer to Siddalls France.


I am now able to live in a beautiful part of France and continue to advise clients on investment and inheritance planning, helping where possible to ensure that their savings work harder for them, whilst minimising French taxation and any issues with the French forced succession rules.


If you would like to seek advice from Marjorie Mansfield, she can be contacted at Siddalls' Bordeaux office, phone +33 (0)5 56 34 75 51, or email bordeaux.office@siddalls.net


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