Britain, France quarrel over who has worse economy

Britain and France clashed over their economic performance, with France describing the British economy as ‘very worrying’ while Britain says the French economy is ‘in downfall’.

World Bank President Robert Zoellick said he was “deeply troubled” by exchanges between Britain and France over resolving the euro zone debt crisis.

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Britain-France rivalries sparked up again.

Differences over how to solve the debt crisis affecting both the euro zone and Britain have chilled an initially warm relationship between the eurosceptic British Prime Minister David Cameron and French President Nicolas Sarkozy.

Relations between the neighbors and age-old rivals grew more tense when Cameron refused to sign up a week ago to a European summit deal on the euro zone’s debt crisis calling for a tougher deficit and debt regime. The decision left Britain isolated among the 27 EU members.

French Finance Minister Francois Baroin had earlier joined a chorus of French criticism of the British economy. “The economic situation in Britain today is very worrying, and you’d rather be French than British in economic terms,” Baroin told Europe 1 radio.

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Regardless of who is right, the British and French economic dominance has long been histories.

France also lashed out against credit rating agencies who warned a possible debt downgrade for France. They should start by downgrading the United Kingdom, which has greater deficits, as much debt, more inflation and less growth than us, and whose credit is collapsing, French central bank chief Christian Noyer had told regional newspaper Le Telegramme.

French Prime Minister Francois Fillon escalated matters by telling reporters in Sao Paolo that the ratings agencies seemed to be ignoring the state of British government finances. We are challenged on the European currency, first of all because we are too indebted, he said.

But we are not the only ones. Our British friends are even more indebted than we are and have a higher deficit problem, but the ratings agencies do not seem to notice this, he added.

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London slammed French comments, UK Deputy Prime Minister Nich Clegg said recent remarks by members of the French government about the British economy were simply unacceptable and that steps should be taken to calm the rhetoric.

London-based Centre for Economics and Business Research (CEBR) claims France has gone “ex-growth” and its output will shrink by 0.6 per cent in 2012. CEBR chief Douglas McWilliams told The Sun: “Britain’s GDP (Gross Domestic Product) will overtake France, it’s just a question of when.”

“The French economy is in downfall, in a worse-case the Euro goes bust, France will fall back dramatically. In this case, France gets overtaken not only by the UK, but also by Brazil by 2015, by Russia in 2016 and by India in 2017.”

The CEBR said France was losing its competitiveness on the international stage. Its export market share has fallen a quarter since it signed up to the Euro.

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British publication ridiculed French economy.

Mr McWilliams added that the French faced years of austerity and its banks may need to raise billions of euros to withstand the chaos in Greece. He added: “The French are doing similar things to (UK Finance Minister) Osborne. But the difference is our government is doing it out of conviction rather than being forced to. It’s surprising that they are so critical of the UK when their own economic fundamentals look worse.”

Writing in the London Evening Standard newspaper, British Finance Minister George Osborne said: “The markets themselves are even asking questions about France’s economic stability. That’s why the French have now had two emergency budgets in four months to try to get ahead of the curve, as we did last year.”

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The attacks on Britain came after last week’s Brussels summit, where Prime Minister David Cameron clashed with French President Nicholas Sarkozy. It was reported that Sarkozy even called Cameron a “stubborn child” for his demand for legal safeguards for the City of London.

The French went on to declare there are now ‘two Europes’ - the Eurozone as one and Britain as another. Sarkozy’s frustration with Cameron boiled over at a summit in October when he told Cameron to “shut up”, saying he couldn’t understand why Cameron wanted to take part in Eurozone meetings when Britain was so critical of the single currency. The UK is not a member of the Eurozone.

Source:

http://www.reuters.com/article/2011/12/ … Q820111217

http://www.marketwatch.com/story/france … 2011-12-19

http://www.telegraph.co.uk/finance/fina … itish.html

http://www.english.rfi.fr/economy/20111 … ism-europe

http://www.thesun.co.uk/sol/homepage/ne … eport.html

http://www.guardian.co.uk/business/2011 … statistics

http://www.dawn.com/2011/12/17/uk-econo … rance.html