France prepares crisis talks on eurozone
LISBETH KIRK
19.08.2008 @ 09:29 CET
Current EU presidency France is preparing crisis talks on how to keep the eurozone economy from falling into recession and is expected to table plans when EU ministers meet in Nice on 12 September.
The initiative was announced by prime minister Francois Fillon on Monday (18 August) in Paris after an emergency session of five French ministers with economic portfolios.
Co-ordination within the euro zone is "indispensable," says French PM Francois Fillon (Photo: © European Community, 2008 )
"We have a common economic area, a common currency," Mr Fillon said, adding that co-ordination within the euro zone is "indispensable".
At a news-conference following the French cabinet meeting on Monday, Mr Fillon added that recent Spanish plans to inject €20 billion of public funds to counter the country's economic slowdown "would make no sense" and "wouldn't be effective" in France, reports the Wall Street Journal.
The announcement follows bleak estimates for the French economy, the eurozone's second largest. According to forecasts released on Monday by the Bank of France, French gross domestic product (GDP) is to grow by only 0.1% in the third quarter of 2008.
Insee, the French official statistics office, confirmed last week that French GDP decreased 0.3% during the second quarter of 2008, making the government's forecast of at least 1.7% growth for the full year look overly optimistic.
France is not the only country with problems, however. The entire eurozone has been pushed into an unexpected trade deficit in June, according to figures from the EU's statistical office released on Monday.
The 15 euro nations bought slightly more goods from trading partners than they sold during the month, posting a trade deficit of €0.1 billion in June, far from the €7.5 billion surplus seen in June last year.
The European Union's trade with most of its major partners grew, with the exception of exports to the USA and Japan, the Eurostat figures showed.
The largest increases were recorded for exports to Russia (+26%), Brazil (+21%) and China (+17%), and for imports from Russia (+27%) and Norway (+25%), both countries being major suppliers of energy.
According to early predictions by Eurostat, GDP in the euro area dropped by 0.2 percent during the second quarter of 2008. This makes it the very first time that the monetary bloc's economy declined since the launch of euro.