Live Markets: Growth downgrade is tough serve for France
LIVE MARKETS-Growth downgrade is tough serve for France Adds new blog post
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GROWTH DOWNGRADE IS TOUGH SERVE FOR FRANCE
An unorthodox match took place at Paris’s famous Roland Garros tennis venue last night, when seven French presidential contenders took to the main court for the first debate ahead of next year’s election.
Far-right leader Marine Le-Pen - who is likely to reach a run-off, possibly against hard-left candidate Jean-Luc Melenchon - sought to land an ace and woo business leaders by pledging to put the public finances back on track.
French stocks slid 1.6% earlier in the day as banks dropped amid worries about political instability and an unwillingness to tackle France’s high deficits, although they rebounded 1% on Friday.
France’s CAC 40 .FCHI has risen just 3% this year compared to rallies of more than 8% for Germany’s DAX .GDAXI and Britain’s FTSE 100 .FTSE.
Problems mounted on Friday, with the national statistics agency downgrading its second-quarter GDP reading, saying the economy flatlined rather than grew 0.2%, after shrinking 0.2% in the previous three months.
That puts the government's full-year growth forecast of 0.7% all but out of reach, and makes cutting the fiscal deficit to 5% harder.
With a tepid economy and rising debt, whoever wins the presidency will need to bring their A-game, to say the least.
(Harry Robertson)
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