French Economic Slowdown Puts More Pressure on May 29

French economic growth slowed more than expected in the first quarter and this is bound to have a negative impact on yesterdays ‘big push’ to win support for the ‘yes’ in the European constitution referendum. Gross domestic product in what is Europe’s third-largest economy grew January -March by only 0.2%. This compares with the October-December period, when it expanded by a revised 0.7%.

“Chirac’s popularity plunged to the lowest in eight years, and constitution opponents increased their lead, according to a survey released today by polling company BVA.

His approval rating fell 9 points to 39 percent this month, according to a survey of 1,014 people. No margin of error was given. That’s the lowest approval rating since April 1997. Prime Minister Jean-Pierre Raffarin’s fell to 21 percent.

Opposition to the EU treaty rose 1 point to 53 percent, a separate BVA survey of 963 people showed, the fifth this week to show supporters in the minority”.

And don’t miss this part:

Opponents of the EU constitution have singled out the European Central Bank for criticism, saying it should seek to boost growth and help the euro to weaken to stoke export demand. The ECB has rejected calls from politicians including Italian Prime Minister Silvio Berlusconi to cut its benchmark interest rate below 2 percent.

“We want a euro policy which is in the interests of Europe,” said Laurent Fabius, the Socialist Party’s deputy leader who opposes the treaty. “Not everyone supports the statute of the ECB. There is a disconnect between the social aspects of the treaty and the social system in France.”

Remember when the ECB does finally bring rates down: you heard about this first on Afoe :).

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About Edward Hugh

Edward 'the bonobo is a Catalan economist of British extraction. After being born, brought-up and educated in the United Kingdom, Edward subsequently settled in Barcelona where he has now lived for over 15 years. As a consequence Edward considers himself to be "Catalan by adoption". He has also to some extent been "adopted by Catalonia", since throughout the current economic crisis he has been a constant voice on TV, radio and in the press arguing in favor of the need for some kind of internal devaluation if Spain wants to stay inside the Euro. By inclination he is a macro economist, but his obsession with trying to understand the economic impact of demographic changes has often taken him far from home, off and away from the more tranquil and placid pastures of the dismal science, into the bracken and thicket of demography, anthropology, biology, sociology and systems theory. All of which has lead him to ask himself whether Thomas Wolfe was not in fact right when he asserted that the fact of the matter is "you can never go home again".