What do you expect after all the demonstrations against the minor labour "reforms" from last summer?
Its not shocking to me.
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/11/11/cnfrance11.xmlShock French slump as Airbus crisis bites
By Ambrose Evans-Pritchard
Last Updated: 12:04am GMT 11/11/2006
The French economy slumped in the third quarter as the Airbus crisis began to exact its toll, dousing hopes that Europe would take over as world's growth engine as America slows. Growth sank to zero with an accelerating twist down in September as car output fell 3.1pc and overall manufacturing slid 1pc, far worse than expectations.
The shock data comes as the yield curve on euro-zone bonds turned negative for the first time since 2000, flashing a warning signal that has often preceded recessions. France's sudden downturn comes amid signs of flagging growth across the euro-zone following a brief burst of energy this year. Germany and Italy both face fiscal austerity packages in 2007.
Alexander Law, an economist at Xerfi, said France's booming growth this summer was an illusion driven by de-stocking.
Jean Michel-Six, an economist of Standard & Poor's, said French exports were suffering a loss of global market share due to high labour costs and the strong euro. "I am afraid that loss of exports is the major factor behind this bad surprise, and Airbus may be starting to play a role. Airbus deliveries generate $1.5bn (£1.01bn) a month for French exports and this is now in question. There had originally been plans to deliver 25 of the A380 jumbos in 2007 and instead there will be just one."
Prime minister Dominique de Villepin was caught flat-footed by the data after playing up the French recovery "miracle" earlier this year. "Sadly we're seeing a pause in growth but this should inspire us to yet more grit and determination," he said yesterday.
There is almost no chance of France meeting the growth rate of 2.5pc predicted by the European Commission for 2007. The European Central Bank is expected to press ahead next month with a quarter point rise in interest rates to 3.5pc, arguing excess credit has swamped the system with excess liquidity.
Jean-Claude Trichet, the ECB's chairman, said this week the ECB was built on a legacy of strict monetary discipline inherited from the Bundesbank that would not be abandoned "lightly".
Resistance is already emerging from a powerful bloc of EU finance ministers threatening to use their Maastricht Treaty powers to clip the wings of the bank if it fails to support growth.
Its not shocking to me.