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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Haim R. Branisteanu who wrote (38985)	8/18/2008 1:35:33 PM
From: elmatador	Read Replies (1) \| Respond to of 217825

France calls emergency economic meeting Key meeting today on country's prospects after Bank of France's monthly barometer of business sentiment falls Adam Sage and Gary Duncan French ministers have been summoned back from their holidays for an emergency meeting in a bid to head off recession after the economy shrunk for the first time in six years. But after approving €13 billion of tax reductions last summer, Francois Fillon, the Prime Minister, had little to offer his compatriots except long-term structural reform. ELMAT: Like I keep saying: economies no longer respond to stimulus He ruled out a cash injection similar to the €20 billion package ordered by Jose Luis Zapatero, his Spanish counterpart, in an attempt to pull Spain's economy out of crisis last week. “We don't need an economic stimulus plan, which would be an artificial plan,” said Mr Fillon. He said he would push ahead with implementation of President Sarkozy's programme, which includes pledges to modernise the economy, reduce state spending and introduce flexibility into a rigid labour market. “We are not relaxing in our effort” to cut public expenditure, Mr Fillon said. He added that he would call European Union finance ministers together in the search for a “common response” to the slowdown. EU countries should “commence this attempt at coordination which, it has to be said, hasn't happened yet,” he said. With the French economy shrinking by 0.3 per cent in the second quarter and the Bank of France predicting growth of just 0.1 per cent in this quarter, the country is teetering on the edge of recession. The meeting in Paris - called in the middle of the sacrosanct Gallic holiday season - amounted to a tacit admission that the Government has abandoned hopes of escaping the global economic crisis. After claiming for months that France would enjoy growth of about 2 per cent this years, Mr Fillon accepted that the figures would have to be 'adjusted'. Most economists say the French economy will grow by between 1 per cent and 1.5 per cent. The details of today’s Bank of France survey showed a rise in spare capacity at businesses, which is already above its long-term average as activity slows. The results also showed the outlook for the intermediate goods sector, car making, and consumer goods sectors suggested declines over the coming months. The only brighter spots were in capital goods, food and agriculture. Companies’ order books fell, although orders remained above normal levels, while stocks of completed goods posted a small rise. Activity in the market services sector, ranging from hotels to computer and engineering services, showed moderate growth but the survey found forecasts pointing to limited growth over the coming months. With consumer spending drying up, the trade gap heading towards €50 billion over the past year, and business confidence dropping by three points in July, Liberation, the left wing daily, said Mr Sarkozy's dream of kickstarting France was “turning into a nightmare”.