French Finance Minister Thierry Breton said yesterday that financial markets and French economic growth forecasts had already factored in a possible new rise in euro zone interest rates.
"The markets anticipate a new (rate) rise before Christmas. . . . This has been factored in by markets and in our forecasts for economic growth for this year and next year," Mr Breton said.
Mr Breton reiterated targets for economic growth of between 2 and 2.5 per cent in both 2006 and 2007, saying that the positive economic trend would help bring the French jobless rate to around 8 per cent in 2007.
"Given the current trend, I think, and I hope that we will reach the 8 per cent mark in 2007. This is a dip that we have not seen in years," Mr Breton said. Talking about currencies, Mr Breton said he thought the euro was "fully valued" and that the yen was progressing in "a favourable direction."
"Regarding Asian currencies there is a problem that is known by everyone. . . . The Chinese and Japanese central banks have taken this into account. Each country do things at its own pace, and France is not here to lecture others," Mr Breton said.
Mr Breton also said that delays in the deliveries of Airbus A380 superjumbo planes could have a small impact on French exports - but nothing lasting.
Mr Breton, who is in New York, said he would accompany French President Jacques Chirac and a group of French chief executives to China on Tuesday to discuss a number of issues, including the aerospace and nuclear industries," he said