France warns its growth may slow
Source: Agencies |
October 19, 2011, Wednesday
|
Print Edition
Print Edition
FRANCE'S economic growth next year may be lower than estimated, the finance minister warned yesterday, after a leading agency indicated it may put the country's cherished triple-A rating on notice for a possible downgrade.
Ahead of the 2012 budget debate in parliament, Finance Minister Francois Baroin said the growth estimate of 1.5 percent for the eurozone's second-largest economy next year was "probably too high."
He blamed the risk of a further global slowdown, which he said could be "very vast" and "severe."
Baroin said the government would "put everything in place to avoid falling into a recession and to protect our country from a downgrade" of its triple-A rating.
However, Baroin said he would not change the forecast yet, especially in the run-up to a meeting of eurozone leaders in Brussels this weekend and the early November meeting of the Group of 20 leaders from the industrial and developing world.
He added: "If we are capable in the next two weeks of measures powerful enough to stop speculation so that we can make people understand we will not let 60 years of European construction collapse, then I will have no worries there will be growth in 2012 and 1.5 percent will be achieved."
With only the German economy bigger, France could well face a big bill for sorting out Europe's debt crisis at a time when it is trying to bring its borrowing levels down. The global slowdown has made it increasingly difficult for countries to balance their budgets as weak growth means less revenue and higher benefits being paid out.
It is in that context that rating agency Moody's said it will be studying whether to put France's rating on notice for a possible downgrade over the next three months. It said it will focus on the government's ability to implement its fiscal and economic reforms as well as other potential adverse economic or financial market developments.
It said the French government has much less room for maneuver in terms of stretching its balance sheet than it had in 2008, adding: "France may face a number of challenges in the coming months - for example, the possible need to provide additional support to other European sovereigns or to its own banking system, which could give rise to significant new liabilities."
The warning comes ahead of Sunday's meeting of eurozone leaders. For days, markets have been hopeful that they would unveil a comprehensive solution to Europe's debt crisis. However, on Monday German officials sought to play down market expectations and the mood of the markets turned sour again.
Ahead of the 2012 budget debate in parliament, Finance Minister Francois Baroin said the growth estimate of 1.5 percent for the eurozone's second-largest economy next year was "probably too high."
He blamed the risk of a further global slowdown, which he said could be "very vast" and "severe."
Baroin said the government would "put everything in place to avoid falling into a recession and to protect our country from a downgrade" of its triple-A rating.
However, Baroin said he would not change the forecast yet, especially in the run-up to a meeting of eurozone leaders in Brussels this weekend and the early November meeting of the Group of 20 leaders from the industrial and developing world.
He added: "If we are capable in the next two weeks of measures powerful enough to stop speculation so that we can make people understand we will not let 60 years of European construction collapse, then I will have no worries there will be growth in 2012 and 1.5 percent will be achieved."
With only the German economy bigger, France could well face a big bill for sorting out Europe's debt crisis at a time when it is trying to bring its borrowing levels down. The global slowdown has made it increasingly difficult for countries to balance their budgets as weak growth means less revenue and higher benefits being paid out.
It is in that context that rating agency Moody's said it will be studying whether to put France's rating on notice for a possible downgrade over the next three months. It said it will focus on the government's ability to implement its fiscal and economic reforms as well as other potential adverse economic or financial market developments.
It said the French government has much less room for maneuver in terms of stretching its balance sheet than it had in 2008, adding: "France may face a number of challenges in the coming months - for example, the possible need to provide additional support to other European sovereigns or to its own banking system, which could give rise to significant new liabilities."
The warning comes ahead of Sunday's meeting of eurozone leaders. For days, markets have been hopeful that they would unveil a comprehensive solution to Europe's debt crisis. However, on Monday German officials sought to play down market expectations and the mood of the markets turned sour again.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
