French Economy in Trouble

BBC News World Edition ^ | 8/20/03

[JerseyHighlander]

New fears have been raised over the health of Europe's economy after France reported negative growth.

The French economy shrank by 0.3% during the April to June period, official figures revealed.

France's economy, the second largest in the eurozone, steadily weakened during 2002.

However, marginally more upbeat figures in the first three months of 2003 had raised hopes of an improvement.

But the latest contraction will dash hopes of a turnaround and is likely to weigh heavily on investor sentiment.

FRENCH ECONOMIC GROWTH Q1 2002: +0.7% Q2 2002: +0.5% Q3 2002: +0.3% Q4 2002: -0.1% Q1 2003 +0.2% Q2 2003 -0.3%

Earlier this month, both Germany and Italy announced they had fallen into recession after recording two consecutive quarters of contraction.

"We are very disappointed with this figure.... this is very negative for France," said Irina Topa, an economist at Societe Generale.

Job uncertainty

France's Prime Minister Jean-Pierre Raffarin said last month he expected the economy to grow 0.1% during the second quarter.

European countries in recession Germany Italy Switzerland Netherlands

And the unexpected contraction spells trouble for the government, which desperately needs growth to generate more tax revenues in order to try to rein in the public sector deficit.

"We expected better figures than this but it seems that, despite the drop in inflation, the bad state of the job market has weighed on consumers," said Jean-Louis Mourier, an economist at Aurel Leven.

Amongst France's economic difficulties, exports dropped by 0.6% and consumer spending eased by 0.2%.

Despite the first half year's poor performance, Mr Raffarin still predicts an expansion of 0.8-1.5% for the year as a whole.

"The second quarter was exceptional owing to the consequences of the war in Iraq, the poor international economic climate and recession affecting several of our partners. It does not represent a trend," a ministry statement said.

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[jonascord]

As long as a majority of cheese-eating surrender monkeys think that, somehow, Paris OWES then a living for voting these communists into office, let them all simmer, over a low flame, until they starve...

This is the same tale we've gotten since the collapse of the Iron Curtain, that the Russians were too stupid to properly administer a Communist State. We French, or Germans, or Swedish, or Canadians, are better than that...

[Graybeard58]

"Is it evil if I feel a bit of....happyness at this news?"

Just be sure to put your hand over your mouth as you snicker and it will be ok.

[pogo101]

France has an economy?

[Voltage]

Couldn't France just pass a law to fix this? They passed a law requiring companies to pay a 40 hour wage for 32 hours of work. Seems like they could pass a law changing mathematics and boost growth several percent easily.

[princess leah]

It's tough to make a living when your hands are continually in the surrender position - in ordere to get a hand out, they atleast have to do a 90 degree change of position - that's a shame...

[playball0]

As we say on Wall Street, "The trend is your friend." And the long term trend in France is straight to the toilet. Why? Because
1) the socialist unions dominate the policy decisions,

2) demographically, France is losing population rapidly and partially being replaced by French-African Muslims,

3)France is so over regulated that it makes Russia look like a free-trade zone.

The French are arrogant cultural snobs who are destroying their culture not preserving it. Their society is so devoid of Divinity now, it's hard to see how they pull out of their death spiral. France has become an object lesson on the danger of removing Divine morality from government.

[StarCMC]

It's working for me! I LOVE THIS NEWS!!!

[Voltage]

There is nothing so entertaining as watching socialist nations die!

[mrtysmm]

I have a certain degree of sympathy for the French people, but, unless they change their leadership it's not going to get better. I personally know a good many people who changed their vacation plans.....to NOT include France, myself included.

[.cnI redruM]

I'm not saying I'd give Jacques Iraq a single red dime. I'm just willing to acknowledge that starting with Charlemagne. It's simply unfortunate that modern French leadership has failed so miserably.