Business World

Sunday 25 February 2018

French/British rift deepens as France’s finance minister takes swipe at British economy

FRANCE’S finance minister has taken a swipe at the state of Britain's economy, hours after French experts predicted his own country would slide into a recession.

Speaking on Europe-1 radio, Francois Baroin said that the situation was even worse in Britain, stating: "We would prefer to be French right now than British, in terms of the economy."

Cross-Channel tensions were stoked last week when the two countries' leaders clashed at an EU summit.

David Cameron was the only leader out of 27 in the European Union to refuse to consider a new treaty that would impose tougher controls on national budgets.

Mr Baroin joined France's central bank chief in saying ratings agencies should be paying more attention to Britain instead.

"The economic situation of Britain is worrying today," Mr Baroin said, without explaining why.

Bank chief Christian Noyer said in an interview earlier this week that downgrading France's credit rating would be "unjustified concerning the economic fundamentals".

"Or else they should start by downgrading the United Kingdom, which has higher deficits, as much debt, more inflation, and less growth than we do, and whose credit is collapsing," he said.

A spokeswoman for Mr Cameron insisted the French criticism was baseless. "We have a credible plan endorsed by numerous international organisations," she told reporters.

The French statistics agency Insee has forecast that the country's economy would shrink this quarter and next amid a worsening outlook for the whole 17-nation eurozone.

Meanwhile, British officials are to take part in "technical discussions" on new arrangements to govern the eurozone economies, despite Mr Cameron’s blocking of a new intergovernmental treaty at last week's Brussels summit.

The move - agreed last night in a telephone call between Mr Cameron and the President of the European Council, Herman von Rompuy - is likely to be seen as an olive branch both to the other EU countries and his Liberal Democrat coalition partners.

"The Prime Minister reiterated that he wants the new fiscal agreement to succeed, and to find the right way forward that ensures the EU institutions fulfil their role as guardian of the EU treaty on issues such as the single market," a No 10 spokesman said.

"That's why we have today agreed to participate in technical discussions to take forward this work."

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