France’s President Emmanuel Macron said on Saturday that the country’s economy will not “fall apart” because of a “fatal flaw” in the banking system, as he vowed to push ahead with a tax reform package that could push the country into a recession if not reversed.
Speaking to French media after a meeting with business leaders, Macron said he was “not going down this road” in his second term, but added that the “crisis will not be solved” by the government.
“The economy is not going to collapse.
But there is a fatal flaw,” Macron said, adding that he would “not let it happen”.”
We are going to fight for a recovery,” he added.”
But we will not let the country fall into dark darkness.”
French financial markets have been on the brink of a rout, as markets have taken a beating from the eurozone crisis and the fallout from the election defeat of conservative Francois Fillon.
Analysts say Macron will likely face a difficult task in persuading investors that the economy is recovering after a financial crisis that cost more than 100,000 jobs in 2016.
“Macron’s message to the French public will be that he is not afraid of the financial market,” said Olivier Blanchard, head of the economic research unit at Société Générale in Paris.
“His message to his partners is: ‘We are not going down that path’,” he added, speaking to Reuters news agency.
“We will do whatever we can to reverse the damage.
We will not accept a collapse of the economy.
We are not a financial market country, so we do not need a rescue package.”
A ‘fatal’ flaw in the French banking system was blamed for the country falling into a deep recession in 2016, and in 2017, it took a further blow when French banks defaulted on sovereign debt.
The banking sector is currently recovering from a huge capital outlay in the 2015 financial crisis.
Macron also said he would push ahead on plans to boost public spending, including on healthcare, education and the environment, in his next budget.
The budget will set out a target of raising at least 2 percent of gross domestic product (GDP) annually from next year, according to a budget document seen by Reuters.