Shock French slump as Airbus crisis bites (Ambrose Evans-Pritchard, 11/11/2006, Daily Telegraph)

The French economy slumped in the third quarter as the Airbus crisis began to exact its toll, dousing hopes that Europe would take over as world’s growth engine as America slows. Growth sank to zero with an accelerating twist down in September as car output fell 3.1pc and overall manufacturing slid 1pc, far worse than expectations.

The shock data comes as the yield curve on euro-zone bonds turned negative for the first time since 2000, flashing a warning signal that has often preceded recessions. France’s sudden downturn comes amid signs of flagging growth across the euro-zone following a brief burst of energy this year. Germany and Italy both face fiscal austerity packages in 2007.

Alexander Law, an economist at Xerfi, said France’s booming growth this summer was an illusion driven by de-stocking.

No one holds the Europeans in lower regard, but we refuse to believe that even they can be surprised by this.


5 Responses to THE SUN? AGAIN?:

  1. John Thacker says:

    car output fell 3.1pc

    Perhaps, Mr. Judd, they forgot their Bastiat and believed that all the burning cars would be good for Peugot Citroen.

  2. Orrin says:

    It would be good if they burned them all.

  3. jd watson says:


  4. ic says:

    The French live in a different reality from us.
    They believe deflation is caused by keeping prices down. They believe if they keep wages
    down, prices of goods will spiral downwards resulting in deflation.
    The rest of the world believe lower prices generate demands -> supplies increase -> increase
    demands for labor -> wages increase -> demands increase -> cycle of economic booms/busts.

  5. jim hamlen says:

    “Europe would take over as the world’s growth engine as America slows”

    No serious writer could have written this, especially not now. Sure, they could have deluded themselves into believing
    it back in 1992, or 1982, or even as recently as 2001. We all remember the ‘EUphoria’ of the late 1990s when the EU
    was stretching out across the continent, and the euro was supplanting all the currencies.

    But writing a sentence like that today – the guy must be on a list in Beijing somewhere.

    And what exactly was ‘France’s booming growth this summer’? An uptick in vists to EuroDisney?

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