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Financial storm ravages French growth, jobs and deficit (karma: 7) en>fr fr>en
By OldLyme

Comments: 25881, member since Fri Jun 04, 2004

On Sat Sep 27, 2008 09:54 AM

Edited by OldLyme (74502) on 2008-09-27 09:55:06

"The world is undergoing a crisis that was born in the United States, which we should not underestimate," Sarkozy said. America sneeezes, France catches pneumonia.

http://www.breitbart.com/article.php?id=080926195837.3825rttx&show_article=1

France abandoned Friday a promise to wipe out its public deficit by 2012, as the global financial crisis sapped growth, hit the job market and forced the government to unveil a gloomy annual budget.

The deficit forecasts were published along with a raft of bad economic news, which revealed the economy had shrunk by 0.3 percent in the second quarter of 2008 and that annual growth would lie between one and 1.5 percent.

France began 2008 hoping for a growth rate of 2.25 percent.

As a member of the 15-nation eurozone single-currency bloc, France had made a commitment to reduce its public deficit -- the shortfall on the central budget plus social security and local government spending -- to zero by 2012.

Instead, the 278.5-billion-euro (406-billion-dollar) budget warned the deficit would remain at 2.7 percent of Gross Domestic Product (GDP) this year and the next, and then fall to 0.5 percent by 2012.

Eurozone member states have to give assurances to keep their deficits under control in order to maintain the stability of the single currency and France could theoretically face sanctions if the shortfall were not made up.

"The crisis came upon us in an extremely violent manner, but the recovery could be extremely strong," he said, before meeting parliament's finance committee. "It's a budget of vigilance and of the future."

Separately, Employment Secretary Laurent Wauquiez announced August had seen between 30,000 to 40,000 new job seekers register with France's state unemployment agency, the biggest monthly spike since 1993.

President Nicolas Sarkozy -- who came to power last year promising to put more money in voters' pockets -- had already warned the French they would not be spared by the global storm and predicted hard times ahead.

On Friday, defending the budget in a cabinet meeting, he said it had been drawn up amid a global crisis and vowed that priorities -- such as the environment, higher education and research -- would not suffer.

"The world is undergoing a crisis that was born in the United States, which we should not underestimate," Sarkozy said, according to spokesman Luc Chatel.

Sarkozy has promised to underwrite French savings accounts in the event any more banks come under pressure and promised measures to limit the salaries and "golden parachute" pay-offs paid to financial executives.

French Prime Minister Francois Fillon Friday said the country would have to ride out the financial crisis -- the likes of which he said only occurs "once or twice in a century" -- together.

"The times are difficult ... There are moments when national unity is needed," Fillon told a public meeting of Sarkozy's UMP party.

www.breitbart.com . . .

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