France economy contracts 4 pct in Q4 2020

French govt hopes lift as US freezes tariffs over tech tax

PARIS, Jan 13, (Agencies): France’s economy contracted by four percent in the final quarter of last year, compared to the previous three months, the Central Bank announced on Wednesday.

In light of the fourth quarter performance, the Bank of France said it was sticking with a previous estimate that the euro zone’s secondbiggest economy shrank by nine percent over the course of last year.

The central bank also estimated the economy was down this month from pre-pandemic levels.

Finance Minister Bruno Le Maire said yesterday that France faces a challenge in achieving its expectations for an economic growth of six percent this year, adding that growth in 2021 depends on how quickly Covid-19 vaccines were distributed.

Also:

PARIS: France’s government breathed a sigh of relief Friday after the US indefinitely delayed tariffs on French cosmetics and other goods designed as retaliation for a French tax on technology giants.

The US Trade Representative’s office said in a statement Thursday that it suspended the tariffs targeting France, which had been scheduled to enter in force this week, because it is investigating similar tech taxes from a growing number of other countries, too.

French Finance Minister Bruno Le Maire said his government “takes note” of the US decision and called for a global agreement on taxing online behemoths like Google and Amazon.

It’s among multiple trade disputes that have damaged trans-Atlantic ties in recent years. In a statement Friday to The Associated Press, Le Maire urged “a global settlement of trade disagreements between the United States and Europe, which make everyone lose, especially in this time of crisis.”

The U.S. government argues that the French tax unfairly targets American companies. France says that its tax targets any company with huge revenues, and is aimed at making the tech giants pay taxes in the countries where they do business instead of tax havens.

While France has led the charge on tech taxes, several other countries have introduced similar measures that worry the U.S., including Britain, India, Turkey and Brazil.