France facing up to minimal economic growth this year

Tue Feb 19, 2013 6:14pm EST
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By Alexandria Sage and Jean-Baptiste Vey

PARIS/ATHENS (Reuters) - President Francois Hollande acknowledged on Tuesday that France will miss its 0.8 percent 2013 growth target, hours after his foreign minister said the growth rate could come in at less than half that level.

Laurent Fabius told RTL radio that French growth this year would be no better than around 0.2 to 0.3 percent.

It was the second time in a matter of days that Fabius, a prime minister in the 1980s and one of the most senior members of the government, let the truth slip about France's economic outlook after revealing last week that the deficit goal would be missed.

"Since on the European level things don't seem to be going so well, we will be obliged to lower it," Fabius said of the growth target.

Hollande's confirmation that the target would be missed - made during a visit to Greece - will add to concerns that the euro zone's second-largest economy is on the brink of recession.

Data last week showed it shrank in the final quarter of 2012.

"For 2013, everyone knows we will not reach the 0.8 percent that was predicted," Hollande told a joint news conference with Greek Prime Minister Antonis Samaras.

He said France would wait for the European Commission's new economic outlook, due on Friday, before issuing a new target at the end of March.   Continued...

France's President Francois Hollande leaves after delivering a speech to celebrate Chinese New Year at the Elysee Palace in Paris, February 18, 2013. REUTERS/Philippe Wojazer