French Prime Minister Francois Fillon said central banks have dealt well so far with global financial market turmoil and that he was optimistic French growth would withstand such turbulence.
In an interview published in Le Monde newspaper on Tuesday, Fillon stressed the need to ensure financial market transparency and said contacts with the German government and other European capitals showed they shared a common view.
"This crisis has showed the need for more transparency on the risks run by investors and the exposure of financial institutions to these risks," he said.
He called for credit ratings agencies to be subject to stricter rules, and for more stringent transparency requirements to be applied to the financial system. "Without transparency, there is no confidence and therefore no efficiency," he said.
Fillon said German Chancellor Angela Merkel, whose country holds the rotating presidency of the Group of Seven rich nations, had not judged it necessary to call an emergency meeting of the industrial powers. But he said he had spoken with Italian Prime Minister Romano Prodi, and that the key was to ensure work was undertaken.
That chimes with comments earlier on Tuesday by Japanese Finance Minister Koji Omi. Omi said there were no plans for an emergency G7 meeting but that he had spoken by telephone with US Treasury Secretary Henry Paulson and they had agreed to keep a close eye on markets and stay in close contact.
Fillon said more financial market turbulence was possible but remained upbeat about the outlook for French growth. "Globally, the fundamentals of the French economy are good: consumption is holding up well, inflation is low, business and household confidence is very good," he said.
He refused to pare the government's growth goals. "The objective of 2.25 percent remains an attainable objective in 2007, as is that of 2.5 percent in 2008 with the measures which will take effect in the autumn," Fillon said. His forecasts are at odds with economists' expectations that growth will struggle in 2007 to reach the bottom of the government's forecast range of 2-2.5 percent.
Such financial market expectations were reinforced after data last week showed the economy grew by a weaker-than-expected 0.3 percent in the second quarter, held back by sluggish exports and stagnant business investment.
Fillon said market turbulence could not be allowed to call growth into question and pointed to two key issues - ensuring private sector banks continued to allow small- and medium-sized firms access to financing and the monetary environment.
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