French economy stagnates in second quarter
Paris • France’s economy stagnated in the second quarter, leaving President Francois Hollande increasingly desperate to fulfill his two-year-old pledge to get the country growing again.
National statistics agench INSEE reported Thursday that the eurozone’s second-largest economy posted zero growth for the second straight quarter.
Finance Minister Michel Sapin immediately acknowledged that the goverment’s forecast of 1 percent growth this year was beyond reach. In an op-ed published on the website of French daily Le Monde, Sapin said: "This year GDP growth will be around 0.5 percent, and nothing currently allows us to expect growth much above 1 percent in 2015."
France’s plight, he argued, was part of a broader economic malaise in Europe.
Sapin had previously stuck to the government’s forecast of 1 percent growth this year since he came into office in April.
The INSEE report showed investment and trade slumping, and consumer spending growing only because energy costs returned to normal levels after a mild autumn and winter.
France has little chance to achieve Hollande’s pledge to European partners to bring the country’s deficit down to 3 percent next year. It missed a targeted reduction in 2013 and looks set to miss again this year.
Hollande has offered tax cuts to businesses and announced tens of billions of euros in spending cuts in his bid to bring France’s public deficit within EU-agreed limits, with so far little to show for it.