Cameron starts new year with ‘swipe at France’

The UK's Prime Minister David Cameron began 2014 by firing off a barb in the direction of France. In a newspaper article this week he boasted that Britain would become the flagship post-recession economy, in what was reported as a swipe at France's "disastrous" economic policies.

Cameron starts new year with 'swipe at France'
Britain's PM David Cameron appears to have got an early dig in at French President François Hollande. Photo: Pascal Segrette/AFP

Prime Minister David Cameron boasted on Wednesday that Britain would become a post-recession flagship in 2014, in what was reported as a swipe at France's "disastrous" economic policies.

Writing in The Times newspaper, Cameron said Britain was a country on the rise as he warned against "the great mistakes that led up to the great recession – more borrowing, more spending and more debt".

Though Cameron did not name the "countries currently following that approach", The Times said it was a "swipe at France" and an "apparent gibe" at President François Hollande.

"Cameron's dig at France in warning over debt", said the front page.

His remarks "will be widely interpreted as an attack on Mr Hollande, who is under pressure as France's economy continues to struggle," the daily said.

Cameron wrote: "2014 is when we start to turn Britain into the flagship post-great recession success story.

"With record numbers of new businesses, we can be the enterprise capital of Europe.

"We must not resurrect the dangerous thinking that got us into the mess from which we are now recovering," the centre-right Conservative leader warned.

Blaming the previous centre-left Labour government, which lost power in 2010, he said the British economy contracted by 7.2 per cent during the economic downturn.

"If you doubt how disastrous a return to Labour-style economics would be, just look at countries that are currently following that approach," he wrote.

"They face increasing unemployment, industrial stagnation and enterprise in free-fall. The opposite of what's happening here.

"Our recovery is real, but it's also fragile, and there are more difficult decisions ahead. A return to that economic madness would devastate this country."

While Britain is predicting economic growth of 1.4 percent in 2013 and 2.4 percent in 2014, France's national economics statistics institute INSEE predicted growth of 0.2 percent for 2013, while the country's belt-tightening
budget is based on projected growth of 0.9 percent in 2014.

France's economy contracted 0.1 percent in the third quarter of 2013.

Socialist French Prime Minister Jean-Marc Ayrault said last month that his government would not copy British economic policies, saying they had created poverty and inequality.

"I see a lot more poverty, more inequalities and if I was to look for a model to reform France I would want to save the French model reforming it and certainly not copy what others do, especially not if we're not talking about the best," Ayrault told French private TV network TF1.

Asked about cuts in public spending imposed by British Prime Minister David Cameron's government, Ayrault said "France is about to regain the level of national wealth it had before the 2008 crisis (which) Britain has still not

"So the situation in Britain, with the mass poverty that it generated is far worse than in France."

In Britain, unemployment has hit a four-year low, at 7.4 percent. INSEE said the French unemployment rate rose by 0.1 percent in the three months to September to 10.5 percent.

Cameron said his government would reduce the national deficit further in 2014, cut income taxes, slash red tape for small businesses and invest in infrastructure projects.

He pledged to cap Britain's overall welfare budget.

"New year is a time for resolutions. Here's mine: to make 2014 the year in which Britain begins to rise," he said.

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UK economy leapfrogs France, new study claims

There was more bad news for France on the economic front on Wednesday as another study claimed that the British economy was currently in the process of overtaking the French as Europe’s second largest.

UK economy leapfrogs France, new study claims
Ouch. France overtaken by the UK as the world's 5th economic power. Photo: Oli Bac/Flickr

While the jury is still out, the evidence is growing to suggest the UK economy is currently in the process of overtaking France’s.

The latest think tank to produce a study with that conclusion is the UK’s National Institute of Economic and Social Research (NIESR), which believes France will grow at just 1.3 percent this year compared to the UK’s growth rate of 2.5 percent.

Simon Kirby, principle research fellow at NIESR, said Britain was expected to overtake France both in terms of purchasing power parity (PPP) – which adjusts for living costs – and at market exchange rates.

“When you compare the two economies, it’s really been a story over the past few years of a relatively subdued domestic economy in France, with a lacklustre housing market, consistent falls in housing investment and most of all subdued consumer spending,” said Mr Kirby.

“An elevated unemployment rate of 10pc, as well as general uncertainty within the monetary union has also been an important factor.”

The study is not the first to show a symbolic shift in Europe’s economic league table. In January, figures from the European Commission’s website revealed that France’s GDP was less than the UK's over 2014.

Newspaper Le Figaro reported that France's GDP, that is, the wealth created by the country, was estimated at €2,134 billion, while the UK’s was quoted as €2,232 billion.

Christophe Blot from the French Economic Observatory in Paris said at the time that such league tables were of little importance.
"It’s not really a surprise that the UK is above France given the problems the French economy has faced, such as record unemployment and a lack of growth," he told The Local.
"Of course the data will be used by politicians and the French bashers and it is a blow to morale but it doesn’t really matter. We are all aware of the problems in France over the last few years but the question is how can we boost growth in the French economy? That’s all that matters.”