UK rejects French central bank chief's economy criticism

16th December 2011, Comments 0 comments

Britain on Thursday rejected criticism of its economy by the head of France's central bank, insisting that its deficit-cutting plan had won the trust of the markets.

Prime Minister David Cameron's official spokesman also downplayed speculation London was seeking alliances with other non-eurozone EU states in a bid to undermine a fiscal pact to save the single currency.

Bank of France chief Christian Noyer told regional newspaper Le Telegramme that rating agencies -- which have warned France could lose its top rating -- should instead turn their fire on Britain due to a slew of gloomy economic data.

Cameron's official spokesman insisted that Britain had a "credible" economic plan, although he refused to be drawn into a new row with France following a fallout over London's decision to veto a new EU treaty.

"We have put in place a credible plan for dealing with our deficit and the credibility of that plan can be seen in what has happened to bond yields in this country," said the spokesman.

Britain and France clashed at last week's EU crisis summit when London refused to join the other 26 members of the European Union in agreeing on a new fiscal pact to prop up the euro.

Cameron on Thursday spoke by telephone with European Council President Herman Van Rompuy and Helle Thorning-Schmidt, the prime minister of Denmark who will take over the rotating EU presidency role in January 2012.

The British prime minister stressed that he wanted the new fiscal agreement to succeed, and called for EU institutions to "fulfill their role as guardian of the EU Treaty on issues such as the single market," said a statement released by Cameron's Downing Street office.

"That's why we have today agreed to participate in technical discussions to take forward this work," it added.

Despite Britain's economic problems, its bonds are seen as a safe haven as a debt crisis engulfs the eurozone on its doorstep.

Fitch, a French-owned ratings agency, has warned London its triple-A rating is at risk if further shocks rock the economy.

In recent days, Cameron has spoken to his counterparts in Sweden and the Czech Republic, two countries which do not use the euro and have voiced reluctance about the fiscal pact.

He has also spoken to the prime minister of Ireland, which may hold a referendum on the pact.

But the premier's spokesman insisted Cameron would "engage constructively" in discussions about the new agreement, downplaying speculation he was agitating against it.

"He has been speaking to a number of different European leaders in recent days and will continue to do so in the coming days, with the objective in mind of making clear that we want to engage constructively," said the spokesman.

"There is an inter-governmental agreement and a discussion about how to implement that inter-governmental agreement and we are seeking to engage constructively in that discussion."

© 2011 AFP

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