Financial Schools Reviews

() - France will take further steps to reduce expenditure if the government receives insufficient revenues, the country’s Finance Minister Christine Lagarde said Friday.

In an interview with the German business daily Handelsblatt, Lagarde said the French government had pledged to reduce its budget deficit to 4.6% of GDP by 2012. If the revenues aren’t adequate, then the government must take further steps to reduce expenditure, she said.

Further, the minister said France’s AAA credit rating is not under pressure. Lagarde said she is constantly in conversation with the rating agencies and explaining them about the government’s economic policy. She said she is convinced that France will retain its AAA rating.

When asked whether France will support Germany’s Axel Weber for the European Central Bank Presidency succeeding Jean-Claude Trichet, Lagarde said it is too early to say for whom the country will decide. She noted that there might be two or three candidates for the post.

On stress tests, Lagarde said it is impossible for her to consider a member state insolvency. She noted that policy makers are testing the risk of a sharp decline in the value of government bonds.

Answering to a question related with stress test criteria controversy, Lagarde said she believes that test criteria are same for all European banks in the same category. She noted that each EU country has so far used different test criteria.

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