Friday, June 1 1:11 AM SGT France sees US coming in for hard landing PARIS, May 31 (AFP) - The French finance ministry said Thursday that it was clear the US economy was coming in for a hard landing, and presented measures to help French households and businesses ensure steady growth at home.

The ministry said the United States would suffer "a hard landing" rather than slowing economic growth gradually, as Washington had hoped to do last year.

And the drop in US economic growth from around five percent in 2000 to roughly one percent this year would have serious consequences for Europe as well, a senior ministry official told reporters during a telephone press briefing.

The French economy slowed down markedly in the first quarter of this year, hit by weaker external trade but supported by domestic consumption, official data showed on Wednesday.

The economy grew by 0.5 percent in the first quarter of 2001 from the figure for the last three months of 2000, when gross domestic productrose by 0.8 percent, provisional figures from the national statistics office INSEE showed.

It was the lowest growth since the last quarter of 1998, when the figure was 0.4 percent.

Paris, therefore, intends to bolster the foundations of French economic growth by encouraging household and industrial demand through tax incentives and confidence-building measures.

"Support household income and give business a breath of fresh air," the official said, outlining proposals to provide growth of more than two percent, even though the last official forecast of 2.9 percent now appears clearly out of reach.

The French tax-reduction plan will be maintained, easing the bill to individuals and business by 38 billion francs (5.8 billion euros, 4.9 billion dollars) in 2002.

Finance Minister Laurent Fabius has said he will remain vigilant to prevent "negative measures" from being taken against businesses, in order to boost confidence after an industrial investment forecast was revised lower.

The ministry will also take care to keep labor laws from being modified with the aim of transferring powers to judges or prefects in terms of job layoffs, a highly sensitive issue following job cuts by the food group Danone and British retailer Marks and Spencer.

"It is not their business to manage businesses," the ministry official said in reference to the judges or top-level regional civil servants.

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-- Carl Jenkins (somewherepress@aol.com), May 31, 2001

Answers

The French are right.

-- Wellesley (wellesley@freport.net), May 31, 2001.