France, Europe Debt | featured news

Even as the euro zone periphery starts to spy some glimmers of hope, concern is mounting that Germany is drifting apart from other countries at the core of the single currency bloc, notably France.

The new tax is expected to be formally announced in the government's first budget on 28 September, but that does not mean there is a sense of panic in France. This new tax will only hit very rich individuals and only for a year or two, to help bring down the government deficit.

French President Francois Hollande has set himself a deadline to turn around the economy by the end of 2014, but having hamstrung the effort with tax rises to meet deficit targets, economists doubt his growth goals will ever fly.

Germany dismissed a French-led call for euro zone nations to issue common bonds, a day before a European Union leaders' summit which investors are looking to for new measures to counter the bloc's debt crisis.

Unemployment rose to 10.9 percent in April, the 11th monthly increase in row, and is likely to add to tension ahead of national elections in Greece and France on Sunday.

Standard & Poor's ratings agency has downgraded France's credit rating, French television channels reported on Friday, citing a government source.

Moody’s Investors Service downgraded Spain’s credit rating Tuesday and warned that France’s rating could also be at risk, citing both nations’ vulnerability as Europe struggles to manage its persistent debt crisis.

The leaders of Germany and France, the eurozone's two biggest economies, say they have reached agreement on strengthening Europe's shaky banking sector.

France is ready to do whatever it takes to rescue Greece, the government said, and urged the debt-laden euro-zone member to swiftly implement the July 21 plan to prevent bankruptcy.

After a series of positive announcement from Greek FinMin Venizelos, rumors that Moody's would downgrade French banks and Germany was preparing for a Greece to default send equities tanking, particularly French banks.