France has entered a recession. The national statistics agency projects that the economy will contract by 0.1% in the third and fourth quarters of 2008, meeting the generally accepted definition. Finance Minister Christine Lagarde blamed the troubles on high oil prices, the strength of the euro earlier this year, and the worsening financial crisis across the globe.
Lagarde insisted that the government is "totally mobilized" to protect French consumers' spending power. She said that the priority should now be on re-establishing confidence in the financial markets, "so that this weak economic conjuncture remains temporary." Other European countries are not faring much better: Last week, Ireland formally declared that it's in a recession, and Germany, Spain, and Britain may all follow.