France pulls out of recession ... but only just

France’s economy grew 1.5 per cent in 2010. Growth in the fourth quarter was lower than  the government hoped - it blames the shortfall on strikes.

Reuters/Regis Duvignau

“This is not disappointing because it corresponds to the latest forecasts,” Economy Minister Christine Lagarde said on France 2 television. “It is a sign that the recovery is there.”

Growth in the fourth quarter of 2010 was 0.3 per cent, lower than 0.5 to 0.6 per cent, which was predicted by the government.

Mass strikes in protest against pension reforms in October slowed growth, according to Lagarde.

The public deficit will be better than the government’s provision of 7.7 per cent of GDP, Lagarde announced Tuesday.

The government has set a target of two per cent growth for 2011.

French President Nicolas Sarkozy supported abolition of the French wealth tax, in a speech on reindustrialisation on Tuesday. The wealth tax is levied on people worth more than 800,000 euros.

“The wealth tax has been abolished everywhere in Europe,” Sarkozy said on Tuesday. “It has been abolished by the socialists in Germany and by socialists in Spain.”

In the eurozone, growth was 0.3 per cent in the fourth quarter of 2010.