"France is totally bankrupt." The unexpected news came as a shock to most, but none more so than President Francois Hollande.
His employment minister Michel Sapin dropped the unexpected news during a radio interview and immediately prompted calls to further question Hollande's controversial 'tax and spend' policies.
The bombshell is thought to have sent the country's business leaders into a state of shock.
"There is a state but it is a totally bankrupt state," Mr Sapin said. "That is why we had to put a deficit reduction plan in place, and nothing should make us turn away from that objective."
Mr Sapin's "totally bankrupt" statement is likely to cause huge embarrassment for Mr Hollande, who will be left to undo the potential damage to his socialist government's reputation.
It also calls into further question Hollande's controversial "tax and spend" policies that have seen numerous entrepreneurs and celebrities leave the country.
The comments came as Mr Hollande attempts to improve the image of the French economy after pledging to reduce the deficit by cutting spending by €60bn over the next five years and increasing taxes by €20bn.
Pierre Moscovici, France's finance minister, immediately tried to play down Mr Sapin's comments, saying they were 'inappropriate'.
Mr Moscovici said: "France is a really solvent country. France is a really credible country, France is a country that is starting to recover."
However unions representing workers at companies including Arcelor Mittal, Credit Agricole SA, Faurecia SA, PSA Peugeot Citroen, Sanofi, Valeo SA and several others gathered in front of his ministry yesterday to protest thousands of job cuts across France, leaving the country with jobless claims at the highest in 15 years.
"Michel Sapin was referring to something Francois Fillon said in 2007," Finance Minister Pierre Moscovici said on France Info radio.
"What he meant was that the state's financial situation was worrying in 2007, it's more worrying now because we've accumulated €600bn more in debt.
"But the term isn't appropriate. France isn't a country that's had to shut public services. We're borrowing today on the markets at 2.2pc, 60 basis points more than Germany, that's down from 200 basis points. France is a country that is completely solvent."
Mr Sapin wanted to point out that "there's a social and economic emergency", requiring the government to act quickly to boost growth and address an unemployment rate that's at 10.3pc. France's jobless claims rose to 3.13 million in November.
"Not a week passes when there isn't a massive firing by a company that is making enormous profits," the unions protested. (© Independent News Service).
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