Wednesday, January 09, 2008

France's November Trade Deficit

France's trade deficit widened to a record in November, prompting a call from Finance Minister Christine Lagarde for a new push to weaken the euro. The shortfall deepened to 4.8 billion euros ($7.1 billion) from 3.6 billion euros in October, the Trade Ministry said today. The deterioration in France's goods and services trade deficit has been apparent for some time now.

The declining competitiveness of the eurozone's second-biggest economy underscores the squeeze companies face from record crude oil prices and a stronger euro. The trade shortfall for the first 11 months already exceeds the record 29.2 billion euros achieved in 2006.

``We're asking, in part with a certain number of our European partners, to re-establish a good currency balance in order to reduce volatility and for currencies to reflect the real strength of economies,'' Lagarde told reporters in Paris. That will ``absolutely'' be her message at the next Group of Seven meeting in Japan in February.

Imports climbed 1.5 percent to 38.1 billion euros, led by an increase in energy products. Crude oil has climbed 74 percent in the past 12 months. The stronger euro, which reached a record $1.4967 on Nov. 23, also makes foreign goods cheaper, leading to more purchases of consumer and industrial goods.

Exports dropped 1.8 percent to 33.3 billion euros, with sales to Asia and the U.S. declining. Shipments of food, consumer goods and industrial products all fell. Airbus SAS shipped 21 planes for 895 million euros in the month.

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