French economic activity reached a level in August not seen since before the Covid-19 pandemic and has continued rising since, aided by a strong recovery in the service sector, according to a Bank of France’s survey of businesses, Bloomberg News reported. Economic output was about 0.5% above early 2020 levels in October and will rise again in November, putting the euro area’s second-largest economy on track for roughly 0.75% growth in the final quarter of the year, the estimates show.
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France
A troubling post-Brexit fishing spat between Britain and France showed few signs of abating Monday, a day before a threatened French blockade of British boats and trucks, the Associated Press reported. British Foreign Secretary Liz Truss warned France that the U.K. will “not roll over” in the face of what she termed “unreasonable” threats from Paris. French fishing crews stood their ground, demanding a political solution to a local dispute that has become the latest battleground between Britain and the European Union.
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France announced Wednesday that it will bar British fishing boats from some French ports starting next week if no deal is reached with the U.K. in a dispute over fishing licenses — and suggested it may restrict energy supplies to the Channel Islands as well, the Associated Press reported. Since the U.K. left the economic orbit of the European Union at the start of the year, relations between London and Paris have become increasingly frayed. France vehemently protested the decision last month by the U.K.
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France’s 2022 budget deficit will be wider than forecast only a month ago after President Emmanuel Macron’s government announced plans to contain energy prices, hand out checks to more than half the population, and make high-risk investments in future industrial sectors, Bloomberg News reported. With just six months to go until elections, Prime Minister Jean Castex said Thursday that around 38 million people earning less than 2,000 euros ($2,330) a month will receive 100 euros in “inflation compensation” to shield them against a surging fuel costs.
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French economic growth will return to around 1.4% a year as public investment to spur the recovery from the Covid pandemic offsets the damage from a sharp recession, according to long-term government forecasts, Bloomberg News reported. President Emmanuel Macron’s government expects stronger growth rates in the short term as activity catches up with pre-crisis levels around the end of this year. As that surge fades, a 100 billion-euro ($116 billion) stimulus plan should ensure growth potential stabilizes at around 1.35%, a social-economic report published Monday shows.
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France urged its European Union partners to consider whether to delay negotiations on the bloc’s future trade agreement with Australia over what Paris says is a lack of trust sparked by a major defense deal among the U.S., Australia and Britain, the Associated Press reported. French European Affairs Minister Clement Beaune said that he would raise the trade pact and the security implications of the deal, known as AUKUS, at a meeting with his counterparts in Brussels, and that France would ensure that it is discussed at EU summits and ministerial meetings next month.
The U.K.’s grid operator delayed the restart of a key power cable from France by almost a month, potentially deepening the nation’s energy crisis, Bloomberg News reported. Half the capacity of the IFA-1 U.K.-France line will come online Oct. 23, following a fire that knocked out the conduit earlier this month, National Grid Plc said in a remit notice. It had originally targeted Sept. 25 for the partial restart. Full 2,000-megawatt capacity is not expected until March 27. The delay comes as the U.K.
French dairy giant Lactalis is in talks to buy Kwality Dairy (now Kwality) in a fire sale as the company’s creditors have failed to reach a timely agreement on its debt resolution, forcing the National Company Law Tribunal (NCLT) to send it to liquidation, the Economic Times of India reported. Talks between Lactalis and Kwality Dairy’s creditors have gathered steam over the past few weeks and could result in the former making a formal proposal for Kwality Dairy in the next 8-10 days. This could be Lactalis’s fourth acquisition in India, if the creditors agree to its proposal.
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The French government plans changes to its state-backed financing program for small firms that was designed to fuel investment after the worst of the Covid-19 crisis as it’s met with little success, Finance Minister Bruno Le Maire said, Bloomberg News reported. The financial instruments, known as participative loans, were meant to ween small companies off a reliance on debt by offering a product that has some of the advantages of equity.
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French economic activity almost reached pre-pandemic levels in July as businesses largely shrugged off some renewed restrictions while supply difficulties increasingly constrained production, Bloomberg News reported. Activity was between 1% and 1.5% below normal in July, the highest it’s been since the pandemic struck, according to the Bank of France’s monthly survey of 8,500 firms. While business leaders expect a similar performance in August, the share of companies reporting supply difficulties rose for the third consecutive month to 49% in July.
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