France tossing too … ?

Surprise on the EU agenda. France, one of Europe’s economic engine, could be the next country is reeling under the weight deficit and public debt. Despite triple-A rating of France, Paris issues could alter the entire European continent, Deutsche Welle comments cited by Agerpres.

French minister for budget and finance, ended abruptly leave. The two officials were summoned urgently to Paris, where they are constantly asked if France would not risk losing the triple A rating in the context of budget issues that shakes. Finance Minister assures that this will not happen. Moreover, he says that “the same agency that has relegated the United States note just confirmed that France is on track.” No budget minister could not discordant note.

But the French seem not to believe all the same. Over 88 percent of them said in a recent national survey that France would be in bankruptcy. And the answer can be easily anchored in reality.

Of all European countries which have triple A rating, France is undoubtedly the most difficult situation. Slow growth and unemployment rate seems to drop too much. As if the news were not worrying enough, rating agency Standard & Poor’s said with nonchalance, in its own analysis, that if Paris does not reforming the health system and pensions, the country’s creditworthiness will decrease.

If this would happen, the consequences for European stability package would be very serious given that France is co-financer of his. If Paris comes under the protective umbrella of the European emergency reserves, other countries will need to pump more money into them. And if you decide to stay, the extent of the French public debt would increase.

Given this scenario, the German Institute for Economic Research concludes that France’s country rating downgrade could result in breaking the euro area. Ministry of Finance considers, however, that Paris is committed to savings and will not deviate from this path. ‘By 2013 we will have a debt level similar to the one I had before the financial crisis’, says confident chief financier of France.


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