France has 'total confidence' in US economy: minister

6th August 2011, Comments 0 comments

France has "total confidence" in the solidity of the US economy, Economy Minister Francois Baroin told AFP on Saturday, the first European minister to react to the US rating downgrade.

"France has total confidence in the solidity and the fundamentals of the US economy, and the American government's determination to implement the plan (to reduce the deficit) approved by Congress this week," he said.

Standard & Poor's cut the United States' top-rank triple-A rating down a notch, to AA+, for the first time ever on Friday, technically signalling that the country's reliability for paying its debts had decreased.

"Standard & Poor's rating is only one element in the appreciation of the United States financial situation. I note that the two other key agencies -- Moody's and Fitch -- confirmed the triple-A rating. It raises questions on taking a decision on the basis of figures which were not consensual," Baroin said.

According to the US Treasury, S&P made a mistake that inflated the projected deficit to the tune of $2 trillion.

For Baroin, S&P's decision nevertheless "confirmed that all major developed countries today are faced with the same priorities: bolster growth and reduce public and private debt."

"The G7 finance ministers are in constant touch to monitor the situation on the markets and discuss what action is necessary," he concluded.

© 2011 AFP

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