France’s Hollande points to economic recovery, urges optimism

Thursday, 18 July 2013 00:00 - - {{hitsCtrl.values.hits}}

Reuters: French President Francois Hollande said Europe’s second-largest economy was recovering and tried to fight deepening pessimism in an

interview, two days after ratings agency Fitch stripped the country of its last top-notch credit rating. He urged the French to be more positive, highlighting a slight rebound in industrial output data, a bump in consumer spending and an improved forecast from France’s central bank for growth in the second quarter. “We must not succumb to self-criticism,” Hollande told France 2 TV in a 30-minute live Bastille Day interview in the garden of the Elysee presidential palace. “For years, we have been the most pessimistic country in Europe, in the world even. There are countries at war that are more optimistic than we are.” Commentators have underscored the mismatch between France’s economic reality and the pessimism of its people, such as in a New York Times op-ed this week titled ‘France’s Glorious Malaise’. “The recovery is here... The second half (of 2013) will be better than the first,” Hollande said. Nevertheless, France’s gross domestic product has been flat and unemployment is at a 14-year high, weighing on Hollande’s approval rating despite his efforts to fix the economy with tax credits for businesses and subsidised jobs. Adding to France’s woes, Fitch cut the country’s credit rating to AA-plus on Friday from its top AAA rating, citing concerns about its budget deficits, high joblessness and weak economic output. Economists polled by Reuters on 4-9 July expected job losses to continue and the economy to shrink by 0.3% in 2013. That is below a government forecast for 0.1% growth this year.