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French fury at Economist cover story

Officials defend the “time-bomb at the heart of Europe”.

French officials accused the The Economist of sensationalism today after the newspaper ran a cover story outlining the profound weaknesses in the French economy under President François Hollande.

The British weekly chastised Hollande’s economic reforms for lacking ambition and scope, warning that the stagnant French economy could bring the euro to implosion as would-be investors lose faith in the eurozone’s second largest economy:

“Our most recent special report on a big European country (in June 2011) focused on Italy’s failure to reform under Silvio Berlusconi; by the end of the year he was out—and change had begun. So far investors have been indulgent of France; indeed, long-term interest rates have fallen a bit. But sooner or later the centime will drop. You cannot defy economics for long.”

Speaking to Europe 1 Radio, French Industry Minister Arnaud Montebourg moved swiftly to rubbish the speculation:

“Honestly, The Economist has never distinguished itself by its sense of even-handendess”, he said.

“It is the Charlie Hebdo of the City”, he added in reference to the French weekly criticised for publishing inflammatory cartoons of a naked Prophet Mohammad.

Prime Minister Jean-Marc Ayrault followed suit, expressing his outrage on French TV station i>tele:

“You are talking about a newspaper which is resorting to excess to sell paper. I can tell you that France is not at all impressed”.

John Peet, The Economist’s Europe editor who penned the report, defended the magazine in an interview with newspaper 20 Minutes:

“The point of this cover is to encourage France … Other countries including Greece and Portugal have conducted many reforms. This is not yet the case in France”.

France’s public debt hit 90 per cent of GDP this year, with many sceptics doubting Hollande’s ability to trim the 2013 deficit to 3 per cent of output.

Meanwhile, unemployment in France has risen to a 17-year high, with a quarter of 18 to 24-year-olds unable to find work.

Holland has faced plunging popularity ratings since his election as he struggles to invigorate an uncompetitive French economy with sluggish growth prospects.

His deficit-cutting measures are primarily made up of tax increases, which have been roundly criticised for stifling business investment, culiminating in opposition from “Les Pigeons” – a collective of entrepreneurs that vehemently oppose hikes in French corporation tax.

Moody’s, a rating agency, is due to review France’s credit rating this month, which has led analysts to believe that the country could face another downgrade after Stand & Poor’s took away France’s AAA- rating in January.

France narrowly avoided recession on Thursday, when data showed unexpected that the economy had managed to eke out 0.2 per cent growth in the third quarter.

Alex Ward is a London-based freelance journalist who has previously worked for the Times & the Press Association. Twitter: @alexward3000

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Geoffrey Howe dies, aged 88

Howe was Margaret Thatcher's longest serving Cabinet minister – and the man credited with precipitating her downfall.

The former Conservative chancellor Lord Howe, a key figure in the Thatcher government, has died of a suspected heart attack, his family has said. He was 88.

Geoffrey Howe was the longest-serving member of Margaret Thatcher's Cabinet, playing a key role in both her government and her downfall. Born in Port Talbot in 1926, he began his career as a lawyer, and was first elected to parliament in 1964, but lost his seat just 18 months later.

Returning as MP for Reigate in the Conservative election victory of 1970, he served in the government of Edward Heath, first as Solicitor General for England & Wales, then as a Minister of State for Trade. When Margaret Thatcher became opposition leader in 1975, she named Howe as her shadow chancellor.

He retained this brief when the party returned to government in 1979. In the controversial budget of 1981, he outlined a radical monetarist programme, abandoning then-mainstream economic thinking by attempting to rapidly tackle the deficit at a time of recession and unemployment. Following the 1983 election, he was appointed as foreign secretary, in which post he negotiated the return of Hong Kong to China.

In 1989, Thatcher demoted Howe to the position of leader of the house and deputy prime minister. And on 1 November 1990, following disagreements over Britain's relationship with Europe, he resigned from the Cabinet altogether. 

Twelve days later, in a powerful speech explaining his resignation, he attacked the prime minister's attitude to Brussels, and called on his former colleagues to "consider their own response to the tragic conflict of loyalties with which I have myself wrestled for perhaps too long".

Labour Chancellor Denis Healey once described an attack from Howe as "like being savaged by a dead sheep" - but his resignation speech is widely credited for triggering the process that led to Thatcher's downfall. Nine days later, her premiership was over.

Howe retired from the Commons in 1992, and was made a life peer as Baron Howe of Aberavon. He later said that his resignation speech "was not intended as a challenge, it was intended as a way of summarising the importance of Europe". 

Nonetheless, he added: "I am sure that, without [Thatcher's] resignation, we would not have won the 1992 election... If there had been a Labour government from 1992 onwards, New Labour would never have been born."

Jonn Elledge is the editor of the New Statesman's sister site CityMetric. He is on Twitter, far too much, as @JonnElledge.