AS FRANCE loses the last of its AAA ratings, President Hollande has been accused of misleading citizens in his televised interview on Bastille Day when he said that the economy was turning around.
Leading economist Ludovic Subran, of finance house Euler Hermès, said: “We can see no improvement in companies’ balance sheets. With business turnover falling we can see little way that investment can take off before the end of the year.”
The same line came from Coe-Rexecode economist Denis Ferrand who told Le Figaro: “There will be no recovery until investment and jobs are starting to rise – and, so far, this has not happened in the second half.” He added that tax rises in September would do little to help any budding recovery.
Ratings group Fitch, the last to maintain France on AAA, finally followed Moody’s and Standard & Poor’s in cutting France to AA+, blaming heavy government debts and poor growth prospects with unemployment hitting a 15-year high of 10.9% in May.
On Sunday, however, Hollande had pointed to long-standing problems in the French economy and said: “It’s not my term in power that is at fault.”
He could also take some comfort from Fitch’s reading, which forecasts that the economy will grow by 0.7% in 2014 after weakening by 0.3% in 2013.