The French economy is in danger of reverting back into recession.
It was the only one of the eurozone’s four major economies in which the private sector shrank in December. In contrast, Germany, Italy and Spain notched up some growth in construction, services and manufacturing during the month.
Spain’s improvement was the largest growth since July 2007.
It is too early to know if France slid back into recession in the final quarter.
Despite promises to lower taxes, public spending and labour costs, President Hollande’s New Year’s address failed to convince the French.
The announced “responsibility pact” did not fire up the public. It introduced a new course in tax policy in favour of business, but at the same time, new VAT increases were introduced on most goods.
In addition, the country’s highest court agreed to a new 75% supertax on well-off companies.
A post-speech opinion poll indicated Mr Hollande is the least popular French president in modern history, with only 27% of the population holding him in regard.
The same poll found that more than seven out of ten people remained “unconvinced” by the changes announced by the President.
