France is not threatened by recession, Finance Minister Francois Baroin insisted on Tuesday, despite stagnant growth and the onset of a new package of government austerity measures. Speaking on Europe 1 radio, Baroin said planned cutbacks would not hit consumer spending, the main motor of the French economy, and promised that they have been tailored to France's economic needs.
Asked if France was faced with a new recession, Baroin said: "It isn't, because we have a plan based on two pillars, a pillar of savings which add up to 12 billion euros, and a growth pillar. "The motor of French growth is consumption, we are protecting this pillar," he said, boasting his plan was "adapted to the French situation" as - unlike the austerity budgets of Spain and Italy - it protects the consumer.
Last month France was forced to reduce its annual GDP growth forecast from 2.2 percent to 1.75, after a second quarter of zero expansion and with markets spooked by rumours French banks remain overexposed to sovereign debt. In August, President Nicolas Sarkozy's government reopened its 2011 budget in order to squeeze out more savings and reassure financial markets that it was addressing the eurozone debt crisis.
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