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France

French government sticks to economic plan despite zero growth

François Hollande and Manuel Valls meet at the Fort Bregançon on August 15, 2014 on sideline of WWII tribute.
François Hollande and Manuel Valls meet at the Fort Bregançon on August 15, 2014 on sideline of WWII tribute. REUTERS/Bertrand Langlois

The French government made clear Sunday that it would not budge from its current economic policies despite showing zero growth during the second quarter.

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Prime Minister Manuel Valls said in an interview with Sunday’s Journal du Dimanche that it was “out of the question” for France to change its course and that businesses must be made more competitive to allow for recovery.

Valls's interview comes on the heels of eurozone growth grinding to a halt, with Germany and Italy contracting and France registering zero growth for a second successive quarter. 

The new data released by Eurostat last Thursday prompted France's Finance Minister Michel Sapin to halve his growth forecast for this year, abandon the deficit reduction target and put pressure on the European Central Bank (ECB) to do more in the face of weak growth.

But with the start of the political season looming, the French people are not convinced that the right policies are in place to do the job. A new poll published in the Journal indicated that eight in 10 French people do not trust the government to pick up the economy.

In the survey, 85% of respondents said they did not trust the government to achieve concrete results against unemployment. Similarly, when asked about growth prospects and deficit reduction, 84% and 82% of respondents said no, respectively.

A steadfast Valls criticised some on the left as being irresponsible with their calls to break austerity, while others on the right for always demanding more.

“We make 50 billion in savings,” Valls said to the paper. “I’m curious to see how they would make another 50.”

Stressing that it takes time to see results, Valls is counting on President François Hollande’s job creation scheme known as the “responsibility pact” to fund lower payroll taxes and help turn France around.

But, his interview sparked a flurry of reaction from both sides of the political spectrum.

Secretary General of the Workers Force Jean-Claude Mailley told Europe 1 that Vall’s comments were a mistake and that there is a lot of discontent among workers.

“I don’t think it’s helpful to say that those who do not agree with the government policy are irresponsible,” Mailley said. “You have to adjust economic policy when it is not working.”

Cécile Duflot, who was Party Secretary of Europe Ecology until May 2012, took to Twitter in Latin: “Cuiusvis hominis est errare, nullius nisi insipientis perseverare in error” – or "Everyone can make mistakes, but only the fool persists in error."

On the left, politicians are urging for a new set of policies less in favour of business that don’t reduce from welfare payments. While on the other end, the right is urging the government to go beyond the 50 billion euros worth of frozen benefits already planned.

Member of the National Assembly of France Eric Ciotti who represents the Alpes-Maritimes department and a member of the Union for a Popular Movement (UMP) also used social media to lash out against policies that he says need to be urgently changed.

"While the French see the wall coming,” Ciotio wrote on Facebook, “Valls is showing his determination to take us right into it…"

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