'The worst is behind us' Breton insists

25th August 2005, Comments 0 comments

PARIS, Aug 25 (AFP) - Upbeat French Finance Minister Thierry Breton declared "the worst is behind us" on Thursday as he pointed to improving industrial output and a pick-up in Germany to justify expectations of stronger second-half economic growth in France.

PARIS, Aug 25 (AFP) - Upbeat French Finance Minister Thierry Breton declared "the worst is behind us" on Thursday as he pointed to improving industrial output and a pick-up in Germany to justify expectations of stronger second-half economic growth in France.

"All economists are saying it, French economists as well as European: we are at the end of a cycle that has not been very positive," Breton told French radio France Info.

When asked about the government target of 2 percent economic growth for 2005, largely discounted by private economists, he admitted that meeting the objective would be difficult.

The French government had started the year with a target of 2 to 2.5 percent and Budget Minister Jean-François Cope had insisted earlier on Thursday that the government would stick by its 2 percent forecast.

"The worst is behind us," Breton continued, adding: "We are counting on a more buoyant second half, and a more buoyant year in 2006."

France registered a mere 0.1 percent rise in output in the second quarter of the year after a 0.5-percent increase in the first quarter.

He said a number of indicators supported his prognosis for the French economy, particularly data showing an increase in industrial orders and production.

"The industrial machine is up and running again," he said.

In neighbouring Germany, one of France's largest trading partners, signs of a pick up were also heartening.

"This is very good news for us, the structural reforms (in Germany) have paid off," Breton said.

On the privatisation of France's motorway companies, he indicated the government was likely to get more than the initial EUR 10bn to 12bn (US $12.3bn to $14.8bn) price tag placed on the three companies.

The French state received 18 bids from private investors on Monday for state-owned majority stakes in Autoroutes du Sud de la France, Autoroutes Paris-Rhin-Rhône and Societé des Autoroutes du Nord et de l'Est de la France.

"When you look at the value of these listed companies, it's true that it makes between EUR 10bn, 13bn or 14bn. We will see," Breton said.

He rejected criticism that the government is selling off profitable assets that would provide a steady stream of revenue for the govnerment.

Breton said the motorway stakes needed to be sold now to enable the government to invest the funds to spur economic growth.

"These are assets, and you have two possibilities: either you let them sleep, or you put them to work," he said. "We have to use the means at our disposal today to reinvest them."

Nevertheless, revenue from the sales, which will be announced in the coming months when the government makes its final choice, would be used to pay down the national debt.

"Debt reduction is a priority," he said.

Copyright AFP

Subject: French news, French economy, economic growth, Thierry Breton, privatisation, German economy

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