Sarkozy chairs emergency meeting
The wave of panic which has spread across markets worldwide saw France as the latest risk area yesterday. French banks were targeted, with shares in Société Genéralé falling by 23% before recovering to 15% down on the start of the day. Credit Agricole fell by 13% and BNP Paribas by 10%.
Meanwhile rumours were circulating about the possibility of France losing its AAA credit rating, even though all three credit rating agencies said that there were no such plans.
As a consequence President Nicolas Sarkozy was forced to return from holiday and call an emergency meeting of his Cabinet along with Christian Noyer the governor of the Central Bank. The president has given ministries one week to draw up radical austerity measures to ensure that France is seen to be acting on cutting its budget deficit.
It is difficult to judge whether the current market turmoil is genuine concern about governments failing to do enough to control their budgets and encourage growth or speculators cashing in on the current mood of instability within the markets.
A number of analysts are now predicting that the Euro is unlikely to be around in its current form in twelve months time.
The French Presidential election is due to be held in April 2012, just nine months away.