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French bank chief: downgrade Brits first

AFP · 15 Dec 2011, 13:38

Published: 15 Dec 2011 13:38 GMT+01:00

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The head of the French central bank criticised the British economy on Thursday, arguing that ratings agencies are targeting the wrong country for a debt downgrade.

"They should start by degrading the United Kingdom, which has greater deficits, as much debt, more inflation and less growth than us," Christian Noyer told the regional newspaper Le Telegramme.

Noyer warned that Britain, which clashed with France at last week's EU crisis summit and refused to join the members of the eurozone single currency bloc in a new fiscal pact, was facing a credit crunch.

Ratings agencies Standard & Poor's and Moody's have warned that France is close to losing its triple-A debt rating over fears that eurozone members can not control their rising debt and deficits.

Britain, which is outside the euro and which has the Bank of England to act as a lender of last resort in the event of debt problems, is seen as a safer borrower by the markets despite economic problems of its own.

Fitch, a French-owned ratings agency, has warned London its triple-A is at risk if further shocks hit the economy.

Fitch predicts Britain's debt will peak at 94 percent of gross domestic product, above Germany at 83 percent and France at 92 percent.

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Noyer also claimed that France's banks were better capitalised than many of their European and American rivals.


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Your comments about this article

2011-12-15 17:40:42 by Steve Potts
It is likely that Chritian Noyer will be proved wrong and France will lose its AAA rating. This is a great shame and all because of the current Euro crisis and the dream of Euro Federalism. The countries that put money into the Euro dream will demand greater accountability from those who are in debt. The countries in debt will resent greater interference from those who put most in. This will lead to turmoil . Also, It now looks as if the Hungary and the Czechs will not be in the group of 26 Euro nations signed up unless plans to harmonise tax are dropped.
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