France cuts growth forecast at emergency summit

FRANCE has cut its forecast for economic growth next year after an emergency meeting between the president and senior finance ministers.

It now thinks the economy will grow by two per cent next year.

The previous forecast was 2.5 per cent.

This year it will 1.4 per cent, the government said.

President Nicolas Sarkozy ordered ministers to interrupt their summer holidays to discuss how France is going to cut its deficit.

They met at his official retreat, Fort de Bregancon, amid fears that in the long term the country faced
the possibility of having its AAA credit rating downgraded by ratungs agency Moody's.

The president said that the reduction of the government deficit in 2011 was a priority.

Public expenditure would be reduced, the president said. He also repeated his pledge not to increase VAT, income tax or tax on companies.

But he also said 10 billion euros of tax breaks would be abolished in the autumn.