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Amid forecasts of recession, French officials say it's even worse in Britain
PARIS (AP) ' As France, Europe's No. 2 economy, faces recession and a credit rating downgrade, its top government officials have sought to deflect investor fears across the Channel to Britain.
Hours after the French national statistics agency predicted the country would slide into a recession, the prime minister claimed Friday that the economic situation was even worse in Britain.
"We would prefer to be French right now than British, in terms of the economy," French Finance Minister Francois Baroin said on Europe-1 radio.
Cross-Channel tensions clearly haven't abated since the two countries' leaders clashed last week over how to keep Europe united. British Prime Minister David Cameron was the only leader out of 27 in the European Union to refuse to consider a new treaty that would impose tougher controls on national budgets.
His decision left him isolated, and the political fallout was becoming evident in the rhetoric of the two countries' officials.
Baroin joined France's central bank chief in saying ratings agencies should be paying more attention to Britain instead.
"The economic situation of Britain is worrying today," Baroin said, without elaborating on why.
Bank chief Christian Noyer said in an interview earlier this week that downgrading France would be "unjustified concerning the economic fundamentals."
"Or else they should start by downgrading the United Kingdom, which has higher deficits, as much debt, more inflation, and less growth than we do, and whose credit is collapsing," Noyer was quoted by the daily Le Telegramme as saying.
A spokeswoman for Cameron, who spoke on condition of anonymity in line with policy, insisted Friday the French criticism of Britain's economy was baseless. "We have a credible plan endorsed by numerous international organizations," she told reporters.
Britain's Treasury chief George Osborne last month raised worries over the state of the French economy.
"We're not any more just talking about countries like Greece, we're talking about big countries like Italy and France ... having to take very, very difficult decisions," he told the BBC.
Late Thursday night, the French statistics agency Insee forecast that the country's economy would shrink this quarter and next amid a worsening outlook for the whole 17-nation eurozone. Investors are largely expecting economic growth in the region to slow sharply, causing recessions in many countries and making it more difficult to lower the government debt that is destabilizing financial markets.
Insee said the French economy would contract 0.2 percent in the fourth quarter and 0.1 percent in the first quarter of 2012. It forecast renewed but weak growth in the second quarter in France, the second-biggest economy in the 17-nation eurozone. It expects the eurozone to experience "a short recessive episode" over the winter, though the financial market volatility was making predictions difficult.
Baroin tried to remain upbeat Friday.
"To the question is France a secure investment, the answer is yes," he said. He said the French banking system ' under heavy strain ' is "among the most resistant in the world."
He shrugged off threats of an imminent downgrade of France's credit rating ' and possibly those of the whole eurozone ' by the Standard & Poor's ratings agency. "We hear the message ... it's one message among others, not the most important."
David Stringer in London contributed to this report.