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Zero growth for France

Friday, August 12, 2011 - 01:52

Aug. 12 - France reports zero economic growth in second-quarter GDP, raising concerns about the government's ability to meet deficit targets. Kirsty Basset reports.

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Economic growth in France ground to a halt in the second quarter of 2011, due mainly to a drop in household consumption, suggesting consumers fear hard times ahead. French Finance Minister Francois Baroin played down the result, saying it was no surprise after a strong first quarter of 0.9 per cent growth. He says the government's growth targets will not be adjusted in light of the data. (SOUNDBITE) (French) FRENCH FINANCE MINISTER FRANCOIS BAROIN SAYING: "We are on course with the objectives for growth and we will of course observe the indicators of the next few weeks very closely, such as what is happening in the United States and global growth. But what you need to bear in mind is that, whatever happens, as we told the French President on Wednesday, we will take the necessary measures to meet the deadline for reducing the public deficit." It comes after a fresh bout of financial jitters, in which ten billion euros were wiped off the value of French banks this week, over fears about their exposure to euro zone debt. On the streets of Paris, there's an air of anxiety. (SOUNDBITE) (French) PARISIAN, FRANCOIS REGIS DAVRIL SAYING: "I don't think that this is a small crisis we are going to get out of that quickly, and I don't think it is just the French banks. I don't see it that way in any case. No, not really. When it comes to that I'm not worried but I do think this crisis will bring about readjustments, a way to anticipate financial markets, ways to regulate commodities maybe in a different way to what we had until now." France joined three other countries late Thursday to ban short selling, in an effort to quell the market turbulence. Kirsty Basset, Reuters.

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Zero growth for France

Friday, August 12, 2011 - 01:52