Reuters
Thu Oct 2, 2008 3:43am EDT
http://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSL249881720081002
PARIS, Oct 2 (Reuters) - France must make tackling the financial crisis its priority rather than keeping the budget deficit within limits set by the European Union, a special adviser to the French President said on Thursday.
"I think that those are the rules for ordinary times and not for times of crisis," Henri Guaino, one of Sarkozy's closest advisers who writes many of his speeches, told Canal Plus television.
"Today, the question is to know whether yes or no, we let the system collapse, or whether we prevent this from happening."
He said European Union rules limiting public sector deficits to 3 percent of gross domestic product were less important under current circumstances.
"They are temporarily not the priority of priorities. The priority is to save the global banking system and the savings of citizens. There is no other choice," he said.
France is hoping for a budget deficit of 2.7 percent of gross domestic product this year and in 2009 but analysts have said slowing economic growth could push the deficit above the EU's thresholds.
On Tuesday, France said it would invest 1 billion euros of state funds to help finance the 6.4 billion euro joint rescue of Franco-Belgian bank Dexia (DEXI.BR: Quote, Profile, Research, Stock Buzz) (DEXI.PA: Quote, Profile, Research, Stock Buzz).
In addition, the state-controlled Caisse des Depots will put in another 2 billion euros.
Government spokesman Luc Chatel has said that France may borrow the 1 billion euros, something it could easily do by turning to the relatively liquid French paper market. (Reporting by Tamora Vidaillet, editing by Mike Peacock)
Comment : sound like the hold-hup is starting in France too.
Thu Oct 2, 2008 3:43am EDT
http://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSL249881720081002
PARIS, Oct 2 (Reuters) - France must make tackling the financial crisis its priority rather than keeping the budget deficit within limits set by the European Union, a special adviser to the French President said on Thursday.
"I think that those are the rules for ordinary times and not for times of crisis," Henri Guaino, one of Sarkozy's closest advisers who writes many of his speeches, told Canal Plus television.
"Today, the question is to know whether yes or no, we let the system collapse, or whether we prevent this from happening."
He said European Union rules limiting public sector deficits to 3 percent of gross domestic product were less important under current circumstances.
"They are temporarily not the priority of priorities. The priority is to save the global banking system and the savings of citizens. There is no other choice," he said.
France is hoping for a budget deficit of 2.7 percent of gross domestic product this year and in 2009 but analysts have said slowing economic growth could push the deficit above the EU's thresholds.
On Tuesday, France said it would invest 1 billion euros of state funds to help finance the 6.4 billion euro joint rescue of Franco-Belgian bank Dexia (DEXI.BR: Quote, Profile, Research, Stock Buzz) (DEXI.PA: Quote, Profile, Research, Stock Buzz).
In addition, the state-controlled Caisse des Depots will put in another 2 billion euros.
Government spokesman Luc Chatel has said that France may borrow the 1 billion euros, something it could easily do by turning to the relatively liquid French paper market. (Reporting by Tamora Vidaillet, editing by Mike Peacock)
Comment : sound like the hold-hup is starting in France too.
