The French President Nicolas Sarkozy on Wednesday called the government back from holiday for an emergency meeting to contain the current turmoil with the speculation reaching France and the possibility of losing its top credit rating.
The French president has given his finance and budget ministers a week to submit the measures needed to lower the debt burden and the ability to meet the deficit reduction targets amid slowing growth.
In the statement after the two-hour meeting in the Elysee Palace Sarkozy confirmed the French commitment to reduce the deficit to 3.0% from last year's 7.1% and the final decision on the new spending cuts to be included in 2012 budget will be decided on in the meeting between the president and prime minister Francois Fillon on August 24.
The jitters over France losing its top credit rating eased with the swift move from the president and also were unfounded for now especially after credit rating agencies confirmed their steady outlook for France.
Standard & Poor's, Moody's and Fitch still see a stable outlook for the AAA rating despite the recent market turmoil that drove yields higher and the pushed the spread with the 10-year German bunds to widened and the cost to insure French debt rallied to a record.