French Finance Minster speaks out over recovery

Christine Lagarde

Economic recovery - or lack thereof - seems to be the word on everyone's lips at the moment. Yesterday, France's Finance Minister Christine Lagarde commented that the fourth quarter German growth data released earlier in the week had been disappointing, suggesting concerns that the eurozone economy will struggle to recover.

In an interview on France Inter radio, Lagarde described the German results as "surprising and disappointing", before adding that she didn't believe in a W-shaped scenario - referring to the so-called 'double-dip recession', a current concern of many analysts.

Concerns

She also spoke about her growing concerns over the situation in Greece and the nation's growing deficit. She told reporters that she believes "light should be shed" on the dealings between US investment bank Goldman Sachs and the Greek government over a currency swap deal struck in 2001.

"We need to know whether it was book cooking and whether it was legal or not at the time it was done," Lagarde said. "We need to know whether it was good for stability- probably not - and, in this case, how we can avoid this situation repeating itself."

Her concerns may be unfounded however, given that earlier in the week Greek authorities explained that the currency swap undertaken in 2001 was "completely legal and compliant with Eurostat," adding how the deal had had no bearing on the country's eligibility for entry into the single currency because Greece was already a member at that time.

Eurostat, meanwhile, has said it wasn't aware of the 2001 transaction, and asked Greece for more information about it by Friday of this week.

Talking about economic recovery specifically, Lagarde added that instead of a double-dip recession, it's more likely that eurozone pickup will be "fragile and arduous, and that growth [...] will plateau."

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