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Economist 'time-bomb' cover probably "touched a raw nerve", says Paris bureau chief

posted 16 Nov 2012, 07:40 by Mpelembe   [ updated 16 Nov 2012, 07:46 ]

The Economist's Paris bureau chief responds to criticism from French government officials over the magazine's time-bomb taunt, saying the article must have "touched a raw nerve".

PARISFRANCE (NOVEMBER 16, 2012) (REUTERS) -  The Economist's Paris bureau chief responded on Friday (November 16) to criticism fromFrench government officials over the magazine's time-bomb taunt, saying the article must have "touched a raw nerve".

French officials angrily rejected a charge by the weekly that France was the "time-bomb at the heart ofEurope and a danger to the euro single currency, accusing the magazine of sensationalism.

The Economist's front cover showed seven loafs of "baguette" bread bound together by a French tricolour with a lit fuse protruding from the centre.

Its main article raised concerns that Socialist President Francois Hollande's economic reforms are not ambitious enough, warning that financial markets could turn against France, and so could jeopardize the future of the euro.

Paris bureau chief Sophie Pedder said one explanation for such a reaction to the article could be because of unease in the French government.

"I think it's not surprising the French media reacted because they are always very interested in what the outside world has to say about France. I think it's much more surprising to have so many government ministers queuing up to tell us that we are, you know, being excessive and exaggerating the problem, partly because I suspect that there must be, there's a raw nerve that's been touched there somewhere that there is such a reaction," Pedder told Reuters Television.

In an interview with Europe 1 radio, Industry Minister Arnaud de Montebourg likened the Economist toCharlie Hebdo, the satirical magazine that sparked an international controversy for its publication of cartoons of the Prophet Mohammad.

"I think that the fact that they are concerned about what we've said suggest that they know that we're not a satirical magazine like Charlie Hebdo, we are a serious magazine which has a provocative perhaps a British sense of humour behind some of the images we put on the cover but the content is serious and it's well analysed and backed up with plenty of documentary fact and I think that it's that that is recognised somewhere by the government and that's why that they've become so sensitive to it," Pedder said.

The government retorted that the Economist report did not take into account corporate tax rebates unveiled last week which amount to a 6 percent reduction in labor costs, a measure it believes will add jobs and reduce a ballooning trade deficit.

Public spending cuts announced in that package, along with existing budget measures, should add up to 60 billion euros in savings over Hollande's five-year term, the government says, an effort the Economist has not factored in.

Moody's rating agency is due to update its view on France this month, raising the prospect of a second downgrade after France lost its AAA-rating with Standard & Poor's in January.

Many economists believe, however, that another downgrade is already priced into the market and see traders loath to ditch French debt in favour of lower-yielding Bunds or riskier Italian or Spanish paper.