France tumbles into double-dip recession
PARIS -- Beleaguered French President Francois Hollande suffered a further setback in his attempts to pull France out of its economic slump after official figures showed Wednesday that the country has entered a double-dip recession.
Figures released by the country’s National Statistics and Economic Study Institute showed that gross domestic product in the European Union’s second-largest economy contracted 0.2% in the first quarter of 2013, matching a decline in the last quarter of 2012. A recession is defined as two successive quarters of negative growth.
It’s the second time in the last five years that France has fallen into recession. The first was in 2008-2009.
The bad news came exactly a year to the day after Hollande of the Socialist Party took office and just two months after the number of French unemployed hit an all-time record in March.
Hollande traveled to Brussels on Wednesday to request an extra two years to reduce France’s budget deficit to the European Union’s limit of 3% of gross domestic product. He was expected to offer a program of reforms in return for being given more time to put France’s finances in order.
However, the EU appeared to be running out of patience. European Commission President Jose Manuel Barroso warned earlier that the delay would only be approved if the French president’s reforms were deemed “credible.”
Speaking on Europe 1 radio, Barroso said France had lost competitiveness over the past two decades and needed serious structural reforms. He added that the country’s tendency to see world developments as threats rather than opportunities was “whistling in the wind.”
France was not the only country counting the cost of what is now the longest recession period to hit the 17-nation Eurozone since the introduction of the single currency in 2002. The zone has now recorded its sixth quarter of decline, beating the 2008-09 recession that followed the global financial meltdown in duration but not, economists say, in depth.
Hollande said France’s economic situation was serious, but he attributed some of the blame to a breakdown in growth across Europe.
Pierre Moscovici, France’s finance minister, told reporters he remained hopeful that the nation would return to growth in the second half of this year, and said the government was sticking to its forecast of 0.1% growth for 2013.
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