France's CAC 40 index dropped by 3.9 percent on Thursday, hitting a two-year low of 3,320, as stock markets fell across the world amid growing fears of another global recession. 

"/> France's CAC 40 index dropped by 3.9 percent on Thursday, hitting a two-year low of 3,320, as stock markets fell across the world amid growing fears of another global recession. 

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ANGELA MERKEL

Paris market hits two-year low

France's CAC 40 index dropped by 3.9 percent on Thursday, hitting a two-year low of 3,320, as stock markets fell across the world amid growing fears of another global recession. 

The Paris market has now had nine consecutive sessions of falls for the first time since September 2002.

The Elysée palace announced on Thursday that President Sarkozy will hold talks on Friday with German chancellor Angela Merkel and Spanish prime minister José Luis Zapatero. The president is currently on holiday at his wife’s holiday home in Cap Nègre in the south of France.

A spokesperson reported that the president has been in regular contact with European Central Bank president Jean-Claude Trichet.

Markets have been concerned about the troubled economies of Italy and Spain and fears have grown about the fragile recovery of the US economy. Employment data expected later today in the US is expected to give more bad news.

Overnight on Friday the Dow Jones index in the US fell by 4.3 percent, the biggest one-day fall since October 2008, while Japan’s Nikkei slid by 3.4 percent. 

The UK FTSE 100 index had a 3.43 percent fall, the biggest since the height of the banking crisis in March 2009, and Milan’s MIB index was down 5.16 percent. Bank stocks across Europe were particularly badly hit.

The European Central Bank’s purchase of eurozone bonds for the first time since March seemed to have little effect on the markets.

European Commission president José Manuel Barroso warned eurozone leaders they needed to do more. 

“Markets remain to be convinced that we are taking the appropriate steps to resolve the crisis,” he wrote in a letter released on Thursday.

He also called for a “rapid reassessment of all elements” related to the recently agreed bailout fund so that it was “equipped with the means for dealing with contagious risk.”

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ANGELA MERKEL

Merkel and Macron to meet for dinner in Berlin on Friday

French President Emmanuel Macron will have dinner with Angela Merkel in Berlin on Friday - the first time this year the German chancellor has received a foreign leader in person, her spokeswoman said.

Merkel and Macron to meet for dinner in Berlin on Friday
Chancellor Angela Merkel and French President Emmanuel Macron at the G7 summit. Photo: picture alliance/dpa/Pool Getty Images/AP | Leon Neal

The working dinner at the chancellery will focus on “European policy issues”, government spokeswoman Martina Fietz said on Monday.

Talks will focus on the “coordination between Germany and France” ahead of an EU summit in Brussels on June 24-25, she said.

The dinner meeting comes after G7 leaders gathered in England at the weekend for their first in-person summit in almost two years.

VIDEO: Watch Merkel’s funniest momentsĀ 

World leaders were also meeting in Brussels on Monday for the first NATO summit with US President Joe Biden.

Subjects on the agenda included how to deal with China’s rise and confronting an emboldened Russia, ahead of a meeting between Biden and Russian President Vladimir Putin in Geneva on Wednesday.

At the EU summit, leaders are due to discuss the Covid-19 pandemic, economic recovery, migration and external relations, including with Turkey and Russia.

At an online Franco-German council of ministers in May, Macron paid tribute to the German chancellor, who is bowing out of politics this year after 16 years in power.

“This last council allows me to say how much the Franco-German relationship owes to your commitment, your willingness to take action, sometimes your patience with us, and your ability to listen,” Macron said.

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