France back in recession
PARIS — France has entered its second recession in four years after the economy shrank by 0.2 per cent in the first quarter of the year, official figures show.
Its economy shrank by the same amount in the last quarter of 2012. A recession is defined as two consecutive quarters of negative growth.
France has record unemployment and low business and consumer confidence.
Separate figures showed that the recession across the 17-nation eurozone has continued into a sixth quarter.
The economy of the 17-nation bloc shrank by 0.2 per cent in the January to March period, according to the EU’s statistics office Eurostat, with nine of its members now in recession.
Germany’s economy, generally considered to be the eurozone’s strongest, grew by just 0.1 per cent in the quarter.
The European Central Bank cut interest rates at its last meeting to a record low of 0.5 per cent in an attempt to stimulate growth.
News of France’s latest recession comes on the first anniversary of Francois Hollande being sworn in as president.
The French unemployment rate is running at 10.6 per cent and is forecast to rise further next year.
Its budget deficit is also expected to remain well above the EU target of three per cent of GDP, with the commission estimating it will be 3.9 per cent this year.
Jobless rate below eurozone average
But France’s unemployment rate is below the eurozone average, which was 11.4 per cent in 2012 and is expected to hit an average of 12.2 per cent this year. In both Greece and Spain the rate stands at about 27 per cent.
France this week passed a range of measures aimed at stopping the rise in unemployment by reforming the country’s labour laws.
These include measures to make it easier for workers to change jobs and for companies to fire employees. (BBC)