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FRANCE’S ECONOMIC ENGINE sputtered to a halt in the spring as French consumers slashed their spending and exports dried up.
The French economy posted zero growth in the second quarter, its national statistics agency said this morning. Government economists had forecast growth of around 0.2 percent in the period.
Growth in the first quarter was nearly 1 percent, but the a sudden reversal in consumer spending and stagnation by the country’s exporters has caused the economy – the Eurozone’s second biggest – to simply seize up.
This morning’s report follows two days of frantic efforts by French officials to soothe investors’ nerves, after suggestions that the country could be the next major economy to lose its coveted triple-A credit rating.
France’s new finance minister took to the airwaves again this morning in a bid to put a positive spin on the weak second-quarter numbers.
“It’s not a surprise that the second quarter is worse than the first, we anticipated this,” Francois Baroin said in an interview on French radio station RTL. He said the government is sticking with its deficit reduction targets despite the lower growth.
The French central bank said this week that the economy will likely grow only 0.2 percent in the third quarter. The bank’s monthly industrial survey showed corporate order books and factory utilisation rates falling for the second month in a row in July.
The former French finance minister Christine Lagarde left the role five days after the end of the second quarter, to take up her new role as the managing director of the IMF.
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Mmm 5.8% with no government, interesting, very interesting,….
Think Italy are due to hold another €8 billion auction tomorrow? Interesting times a head….
Roads and cans come to mind. But when it reaches the end of the cul de sac that’s when another adage comes to mind ventilation equipment and human waste.
I get the impression that the IMF will start to play a much bigger role in all of this, because much less politics involved with them and its in the interest of most countries in the world to contribute to the IMF to save ours and other countries, because if the Euro collapses it will drag down everyone except for mongolia perhaps!
I think the Euro crisis would bring the IMF down. America is in no position to give a marshall plan as they need one themselves. Cant see China footing the bill either.
You could be right, but if they have the money they would be better of lending it to save the economies under strict IMF bailout conditions. This way they keep every thing afloat and earn interest on their cash. If they don’t then All economies will suffer more including China, and I’m guessing they want their current prosperity to continue for a long time yet.
have your say