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Economy

France in Recession – Government Maintains Austerity Course

Translated Saturday 18 May 2013, by Gene Zbikowski

France has gone into recession with a second quarter of negative growth, like most of the euro zone countries. This situation is the result of European economic austerity policies.

This comes as no “surprise” according to Economics Minister Pierre Moscovici, who on May 15 guaranteed that it is “largely due to the euro zone environment.” Thus France joins nine euro zone countries in the recession spiral and in the overall gloomy economic climate in Europe. Indeed, at the same time that the French statistical bureau (INSEE) statistics came out, the European statistical bureau, Eurostat, announced that the recession continued in the euro zone in the first quarter, with a 0.2% fall in gross domestic product. For the whole of the European Union, gross domestic product fell by 0.1% compared to the previous quarter.

For all that, Pierre Moscovici stated on May 15 that France’s economic goals for 2013 remain unchanged, with a growth forecast of 0.1%. “We’re maintaining both the 2013 growth objective and the prospect of reversing the unemployment curve,” stated the Economics Minister following the meeting of the French cabinet.

Hollande maintains his objectives.

French President François Hollande also reacted to these figures. Through government spokeswoman Najat Vallaud-Belkacem, the president admitted that “the economic situation is serious,” but “less serious than that experienced in 2008-2009.” François Hollande also pointed to the economic situation in Europe, notably emphasizing “the fall in European demand” and stating that France is no isolated case.

For the first time in four years, France has gone into recession. The figures published by the INSEE on May 15 show that gross domestic product fell by 0.2% in the first quarter of 2013. This is the second straight quarter in which French growth has been negative. Indeed, the last three months of 2012 were also marked by a 0.2% drop in GDP.

“They country’s headed straight for disaster”

According to Olivier Dartigolles, the spokesman for the French Communist Party, “this is proof that France is headed for catastrophe with this austerity policy. All the euro zone economies that have chosen to follow the European Commission’s stupid and retrograde rules are coming up with the same result: their economies are ruined. Lacan used to say that reality is what you knock up against. The country’s headed straight for disaster. More than ever, we urgently need to change course and to change policy. We urgently need to begin a change.”

Noting that “for the first time since 1984, the purchasing power of the French is falling” with a 0.9% drop in 2012, the Left Party also thinks that it is “time to change course.” The Left Party proposes to do so through “an increase in economic demand based on massive investment in the real economy and in ecological transition, on the creation of hundreds of thousands of public-sector jobs, and on the abolition of non-permanent jobs.”


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