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France blames Brexit as economy looks set to suffer

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France blames Brexit as economy looks set to suffer
08:05 CET+01:00
France's economy will grow less than expected next year, the country's central bank predicted on Friday, and it's partly due to the UK voting to leave the European Union.

The French central bank trimmed its growth forecasts for 2016 and 2017 on Friday, citing a deterioration in the global economy and Britain's decision to leave the European Union.

"The outlook is in particular suffering from less favourable external demand in relation to France, notably because of the impact of Brexit," the Bank of France said in a statement.

It revised its 2016 and 2017 growth forecast down to 1.3 percent having previously expected growth of 1.4 percent this year and 1.5 percent next year.

Britain voted on June 23 to leave the EU, and Prime Minister Theresa May has promised to trigger the two-year divorce process at the end of March.

European Central Bank chief Mario Draghi Monday highlighted the risks which the referendum result poses for European economies.

"Looking at the recent events, it is quite clear that geopolitical uncertainty has become the major source of uncertainty for the months to come," he told EU parliamentarians.

While Brexit may had an impact on growth France is pulling out all the stops to try and boost its economy by trying to persuade want-away banks and businesses to move from London to Paris.

On July French PM Manuel Valls announced a series of tax measures aimed at making Paris more attractive to big financial business.

"In this new environment which is taking shape, we want an attractive France," he said, adding that he wanted to improve the tax and legal framework to "welcome even more companies (and) make Paris the capital of smart finance."

In November Paris set up a one stop shop to provide firms everything they and their staff need to relocate across the Channel.

The latest initiative hardly had the catchiest title: “Choose Paris Region – Welcome to Greater Paris” but it was clear what France was trying to do.

It was unveiled by the prime minister and was essentially the creation of a one stop shop aimed at providing businesses with everything they need if they wish to flee the UK and head to Europe.

It will be located at 11 Rue Cambrai in the 19th arrondissement of the city and will essentially help businesses and staff overcome the administrative hurdles of resettling in France.

Ross McInnes a native Australian and naturalized Frenchman who will be the ambassador of the new scheme said companies looking to leave Britain will find Paris is an attractive proposition.

"Anyone who's worked in France for the last few years knows to go beyond some of the cliches and look at hard facts, hard figures," he told Reuters.

"This is a business friendly country," he said, before telling journalists "When was the last time you booked a weekend in Frankfurt?” 

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