**[investwise]** How Can Europe Be Safe, If PIIGS Debt Is Held By Germany and France

 

French Finance Minister Christine Lagarde said Tuesday that there's no reason to worry about a downgrade in France's credit rating given increasingly aggressive cost-cutting by the government. But she questioned some of the belt-tightening measures that target government ministers themselves, announced the day before by President Nicolas Sarkozy.   Asked whether she fears a downgrade, she said on RMC radio, "I have no reason to think so" because the government is focusing on spending cuts instead of tax hikes that could stifle growth.   "It is a policy that is reasonable and that is founded at the same time on trimming public spending and encouraging effective investment," she said.   In addition to pension reform that the government says will save euro19 billion and other budget cuts, Sarkozy ordered the government Tuesday to sharply rein in spending on ministers' trips, cars and staff.   Spending by some ministers has prompted public criticism, seen as inappropriate when many workers are struggling after the country's worst recession in decades. Lagarde, who has been in the forefront of international efforts to tackle the financial crisis and Europe's debt crisis, questioned whether cutting eight of her 28 aides, as the president suggested, "will make the best savings."   She said her aides already "work like beasts." But she said she would abide by the president's orders. "It's a sign that we should be extremely attentive to public spending." Safe Harbor Statement: Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.   Nothing in this article is, or should be construed as, investment advice.

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