Relations between France and Britain, already frayed in the aftermath of last week’s EU summit, look set to deteriorate further following comments by French Finance Minister, Francois Baroin.
Asked about a potential downgrade of his country’s prized AAA-credit rating, he said the situation could be worse – pointing a finger across the channel.
“We don’t have any lessons to give, but we don’t want to be given any lessons either. We were given a few and it’s true that the economic situation in Great Britain is very worrying and that today, from an economic standpoint, we prefer being French than British.”
It follows an attack on ratings agencies by French central bank governor, Christian Noyer, who charged that their decisions were guided more by politics than economics.
He said basic economic fundementals should lead to Britain being downgraded first, saying it had more debt and less growth.
The remarks have been met with disbelief in Britain. Dominic Johnson of Somerset Capital…
“It would be ridiculous to suggest that the U.K. should be downgraded before France. Firstly, we have high extra flexibility of having our own currency, and secondly, we have a far more dynamic economy at its core and remember in France it is illegal to work more than 35 hours a week. We don’t suffer those extremely complicated and troublesome regulations in the U.K., we have a far more dynamic and entrepreneurial economy and ultimately I think we’re more prepared to accept the situations that revolve around free markets then some of our European neighbours are.”
Relations between the two nations become strained last week after Britain’s Prime Minister, David Cameron, refused to sign up to a new EU treaty.
“When you look at the core comments coming out of Europe they say Britain wants to be in a free trade zone rather than in a community of European countries, a social democracy of European countries. And I actually agree with them.”
And although Britain won’t officially be part of any new EU deal, it has been asked to sit in on negotiations.
Earlier this month France became one of 15 eurozone members to be put on negative watch by Standard & Poors. Markets are still awaiting the agency’s verdict on the deal agreed, by most, in Brussels.