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ECONOMY

French economy minister ‘worried’ by British ‘disaster’

France's economy minister said Friday that he was worried by the financial turbulence in Britain, criticising Prime Minister Liz Truss's economic policies for causing a "disaster" of high borrowing rates for her country.

French economy minister 'worried' by British 'disaster'
French Minister for the Economy and Finances Bruno Le Maire during a press conference in Paris on September 26, 2022. (Photo by STEPHANE DE SAKUTIN / AFP)

“I’m not worried about the situation in the eurozone,” Bruno Le Maire told Europe 1 radio when asked about the risk of the crisis spreading. “On the other hand, I am worried about the British situation.”

“What does it show? It shows firstly that there are costs for financial and economic policies,” he said.

Truss’s “mini-budget” announced last Friday included major tax cuts that would need to be financed by extra borrowing, spooking investors who immediately questioned the credibility of the policies and Britain’s financial standing.

“When you take on major costs like that, with spectacular announcements, as some opposition parties want to do in France, it perturbs the markets. It perturbs financial balances,” Le Maire said.

“And it leads to a real disaster with interest rates which are 4.5 percent or even higher in Great Britain. We have interest rates which are reasonable, which are quite close to Germany’s because there is consistency in our economic and financial policymaking,” he said.

“The second thing is that leaving Europe comes with a considerable cost because Europe is a protection,” he added, referring to Britain’s exit from the European Union.

The pound fell to an all-time low against the dollar and the yield on 10-year British government bonds — which sets the cost of borrowing for the government — briefly rose to above 4.5 percent on Wednesday.

That led the Bank of England to intervene with a £65 billion emergency bond-buying programme to stabilise the market.

Le Maire has been under pressure this week to explain his own budget choices, with the government planning to borrow a record €270 billion next year and a run a deficit of 5.0 percent of GDP.

Some analysts see the deficit as likely to be higher because of Le Maire’s optimistic growth forecast for the economy and assumptions about savings from a controversial pensions reform that has not been passed by parliament.

French-British relations have been rocky for years, particularly under former prime minister Boris Johnson, with a host of issues souring ties from Brexit and fishing rights to migrants.

French ministers had been reluctant to comment on Truss since she came to power despite deep concerns about her Brexit policies and her statement while campaigning that she did not know if French President Emmanuel Macron was a “friend or foe.”

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POLITICS

French MPs vote to add the right to abortion to the constitution

Lawmakers in the French parliament voted on Thursday to add the right to abortion to the constitution in response to recent changes in the United States and Poland.

French MPs vote to add the right to abortion to the constitution

Members of parliament from the left-wing La France Insoumise (France Unbowed) party and the ruling centrist coalition agreed on Thursday on the wording of the new clause, which was then put to a larger vote.

“The law guarantees the effectiveness and equal access to the right to voluntarily end a pregnancy,” reads the proposed constitutional addition to article 66.

It was passed in the Assemblée nationale with a large majority – 337 to 32 against, but still needs to be approved in the Senate.    

“It’s a big step… but it’s just the first step,” said centrist MP Sacha Houlie from Macron’s Renaissance party.

The initiative was prompted by the US Supreme Court’s explosive decision this year to overturn the nationwide right to termination procedures for Americans.

In Europe, the conservative government of Poland has also heavily restricted abortion rights.

LFI lawmaker Mathilde Panot said the move was necessary in France to “protect ourselves against a regression”.   

In a speech to parliament, she cited the late French writer and women’s rights activist Simone de Beauvoir.

“We only need a political, economic or religious crisis for the rights of women to come into question,” she said.

The agreement was a rare instance of cooperation between the hard-left LFI and the centrist allies of President Emmanuel Macron – who no longer have an overall majority in the National Assembly.

A previous attempt to inscribe the right to abortion as well as contraception into the constitution, with different wording, was rejected by the conservative-dominated Senate in October.

Many conservative and Catholic politicians have announced their misgivings, seeing it as unnecessary given the legal protections already in place.

“It appears totally misplaced to open a debate which, although it exists in the United States, does not exist in France,” far-right leader Marine Le Pen said in a statement this week.

“No political group is thinking about questioning access to abortions,” she said.

She voted in favour of the change on Thursday, while MPs from her party and the right-wing Les Républicains abstained.

Abortion was legalised in France in 1974 in a law championed by health minister Simone Veil, a women’s rights icon granted the rare honour of burial at the Pantheon by Macron upon her death in 2018.

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