French finances in trouble

Beijing News.Net
Sunday 23rd September, 2007

European Central Bank head Jean-Claude Trichet says France's public finances are in very great difficulty.

Trichet said in an interview on Europe 1 radio that the deficit was becoming a heavy drag on the economy of France.

Regarding the squeeze on credit sparked by the U.S subprime crisis, Trichet said the ECB had taken the right decision by pumping tens of billions of euros to facilitate inter-bank lending in global money markets.

He added that there were lessons to be learned from what was happening and that those who had taken unwise risks should be punished.

Since coming to power in May, French President Nicolas Sarkozy has caused Mr Trichet to worry over his plans to cut taxes in order to stimulate economic growth.

Eurozone finance ministers committed in April to balance their budgets by 2010, but Sarkozy warned in July that as a result of his plans this goal might not be achieved until 2012.

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