Nicolas Sarkozy, the French president, gave his finance and budget ministers a week to devise new measures to cut France's budget deficit as shares in the country’s banks plummeted in the latest bout of financial markets turmoil.
Mr Sarkozy summoned his key ministers back from holiday for an emergency meeting as concern mounted over prospects for growth and the country’s ability to meet its debt targets. In a bid to reassure nervous markets, Mr Sarkozy said these “pledges will be kept whatever the evolution of the economic situation”.
The meeting came as rumours circulated about French banks and the possibility of a French credit rating downgrade, with Société Générale plunging by as much as 23 per cent. It closed down 15 per cent, after it denied rumours over its financial stability, while Crédit Agricole was off 12 per cent and BNP Paribas down 9 per cent. Other European banks slumped too, with Italy’s Intesa Sanpaolo down 14 per cent. SocGen’s shares have fallen by third this month and by 45 per cent since the start of the year.