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French recovery fizzling out?

Thursday, November 14, 2013 - 02:16

Nov 14 - Euro zone economic recovery has slowed more than expected. It was weighed down by shrinking output in France which is increasingly worrying investors. David Pollard reports.

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This French piano company made instruments for Ravel, Stravinksy and Chopin during its two centuries of history. Now Pleyel says it's to close. Leaving fourteen craftsmen out of work. SOUNDBITE (French), Virginie Boyer, Pleyel piano tuner, saying: "It's a feeling, first, of sadness, helplessness and injustice." It says it's a victim of high costs and competition from China. In an apparently out of tune French economy. Latest growth figures show France slipping backwards over the most recent quarter. A drop where a rise was expected - and confirmation too that the jobless queue is growing. French finance minister, Pierre Moscovici, says France is still on track for growth over the year as a whole. SOUNDBITE (French) French Finance Minister Pierre Moscovici, saying: I'm sticking to my figures. 0.1 to 0.2 percent for 2013, 0.9 for 2014." But contrast Germany - its economy still powering the euro zone. It grew 0.3 per cent, the gap between the two prompting comparisons between France and its troubled southern peers, Spain, Italy and Greece. Michael Van Dulken of Accendo Partners. SOUNDBITE (English), Michael van Dulken, Head of Research, Accendo Markets, saying: "If anything today shows that it's not just a north-south divide, but if anything there may be divides within the north, too." On the sidelines, the OECD - based in Paris - is calling for France to do more to keep up reform. Michael Leister of Commerzbank agrees. SOUNDBITE (English), Michael Leister, Senior Rates Strategist, Commerzbank, saying: "What they are doing wrong is that they are not doing much, that's how I would put it, in terms of, you know, increasing competitiveness and simply making the country a more attractive place to invest in and also to do business." Another cause for concern: French inflation numbers fell 0.1 per cent in October. That's the weakest monthly rate in four years - and follows hard on the heels of news that Spain is now in deflation. The figures once again turn attention on the ECB - although the jury's still out on what sort of action it might take. Either way, it'll be too late for Pleyel. In its heyday it produced 3,000 pianos a year. Its doors will close for the last time by the end of this year.

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French recovery fizzling out?

Thursday, November 14, 2013 - 02:16