President Sarkozy summoned his key ministers back from holiday for an emergency meeting as concern mounted over prospects for growth and the country's ability to meet its debt targets.
Sarkozy gave his finance and budget ministers a week to devise new measures to cut France's budget deficit as shares in the country’s banks plummeted in the latest bout of financial markets turmoil. In a bid to reassure nervous markets after credit default swaps reached a fresh record for France of 176 basis points, Mr Sarkozy said these “pledges will be kept whatever the evolution of the economic situation”.
The meeting came as rumours circulated about French banks and the possibility of a French credit rating downgrade. All three main rating agencies have reiterated that France’s triple A credit rating is stable, but several investors and analysts have said it could be next in line following the downgrade of the US from triple A to double A plus last Friday.
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