‘We have avoided catastrophe’

PRESIDENT Sarkozy insisted “we took important decisions that have avoided catastrophe”, as he spoke on French television after the euro summit.

However he admitted more austerity measures were on the way for France.

He told TF1 and France 2 that he was “confident” Greece would come out of the serious financial straits in which it finds itself.

Furthermore the salvage plan as worked out consists of loans at interest that are meant to be paid back, he said.

“If the Greeks make the efforts we’ve asked for, it will cost France nothing and Europe nothing. For the moment it has cost the banks €100 billion.”

As to the French economy however, he confirmed rumours that more austerity measures were on the way, to the tune of €6-8 billion in savings; not to be discussed further until after the G20 summit in Cannes early next month.

He said priorities will include reducing the social security debt, adding it is because of this that France finds itself under scrutiny from the credit rating agencies.

France has reduced its predictions for next year’s growth to 1%, down from 1.75%, he said.