IMF issue stark warning to French government

Published on July 28, 2011 by David Turner · No Comments

Fears were growing last night that France could be the latest Euro-zone country dragged into the economic meltdown engulfing the continent.

The International Monetary Fund (IMF) have informed Nicolas Sarkozy’s government that further spending cuts are required if the country is to hit its planned budget targets.

There are widespread fears that the nations’ credit score could be downgraded, a galling prospect for the rest of Europe who are still reeling from the sudden decline of economies in Greece, Ireland and Portugal.

With economic uncertainty surrounding the Unites States as well at the moment, global economic analysts must be watching with their hands over the eyes.

Sean Power, an analyst at City Index, said “We have seen risky asset classes sold off across the board with a clear estimation in investment uncertainty over both the sovereign debt situation and also the deadlock in the U.S over how to reign in the burgeoning deficit and raise the debt ceiling.”

It must have been particularly embarrassing for Christine Lagarde, the former French Finance Minister, to issue the warning. However, it was clearly required to stoke the country into action over its weakening economy.

France is the second biggest economy in the Euro-zone and any downgrading of its credit score could trigger panic that yet another bailout would be required for a nation in that region.

As with the situation in the United States, the rest of the world looks on with a mixture of intrigue and trepidation.

Transfer Money to France

If you are looking to invest in France, think carefully about how you will be transferring money to France. Foreign currency exchange rates quoted by banks are almost always worse than the exchange rates available through specialist currency dealers.

So if you are sending money to France – which you will inevitably have to do if you are looking to make a property investment, be sure to compare the market before you buy your overseas currency.