French president Nicolas Sarkozy pledged today to stick to the country’s deficit-cutting goals amid rising concerns it could be the next triple A-rated economy to suffer a ratings downgrade.
Some analysts have warned that France - the world's fifth-biggest economy and a driver of the euro zone - cannot afford to keep bailing out poorer European states especially at a time its growth rates are moderating.
Mr Sarkozy, who along with other European leaders has come under criticism for staying on holiday as the markets were gripped by fear, cut short his trip to the French Riviera with his pregnant wife to summon key government ministers for an emergency meeting on the financial crisis.
No new measures were announced, but Mr Sarkozy insisted that "commitments to reducing the deficit are inviolable and will be maintained."
Worries over the debt problems afflicting a number of European countries as well as the US have knocked confidence over the global economic recovery and triggered turmoil in financial markets around the world.
Mr Sarkozy said the French government will make new decisions on August 24th aimed at ensuring that it attains its deficit-reduction objectives. He also reiterated his call for a constitutional change requiring balanced budgets.
France has for years failed to deliver on its deficit reduction promises.
It is now aiming for a deficit of 5.7 per cent of national income this year from 7.1 per cent in 2010, and 4.6 per cent next year. It is targeting a deficit of 3 per cent of gross domestic product in 2013, a target that has been delayed multiple times, which Mr Sarkozy has blamed on the global financial crisis.
"We will take the necessary measures to reach these goals," finance minister Francois Baroin said
After ratings agency Standard & Poor's downgraded US debt last week, worries surfaced that France could be next to lose the coveted and rare AAA rating.
AP