TPT September 2009

G lobal M arketplace

largely to the French government’s $37bn economic stimulus programme, which requires all projects to be under way in 2009 and expects to have emptied its coffers by 75% by the end of the year. “As it turns out,” wrote Mr Schwartz, “France’s more centralised, state-directed economy – so often criticized in good times for smothering entrepreneurship and holding back growth – is proving remarkably effective at deploying funds quickly and efficiently” in bad times. (“Unlike US, France Is Deep into Stimulus Projects,” 7 July.) A notable feature of the French initiative is the earmarking of stimulus funds for restoration and improvement of cathedrals, chateaux, palaces, museums, and other monuments of the nation’s cultural patrimony – as well as a new $14mn centre for Mediterranean culture, at Marseilles. These efforts are going forward even as France races ahead of the US in such ‘shovel ready’ projects as upgrading railroads and filling potholes. “America is six months behind,” Patrick Devedjian, the minister in charge of the French relance, or stimulus, told the Times. “It has wasted a lot of time.” (The reference is, of course, to US President Barack Obama’s economic stimulus plan, which will not reach the current French disbursement percentage until the fall of 2010.) In Mr Devedjian’s opinion, by the time Washington gets around to doling out most of its money, the economic crisis could be over. › The minister in charge of the stimulus is not the only optimist to be found in French official circles. Insee, the National Institute of Statistics and Economic Studies, expects the economic situation to stabilise in France by the fourth quarter of 2009, around the time that the American economy is expected to start sending up the ‘green shoots’ that Mr Obama is expecting. Eric Dubois, head of Insee’s short-term analysis department, has even said he discerns “a growing possibility” that French GDP could rise as early as the third or fourth quarter. Update: It was announced on 13 August that France, along with Germany, had seen a second quarter increase in GDP of 0.3%, after four consecutive quarters of contraction. › But the Times noted that, despite these expressions of confidence, France remains highly vulnerable to the threat of rising unemployment. The OECD expects the French jobless rate, currently 8.9% and lower than the 9.5% rate in the USA, to hit 11.2% by the end of 2010, above the expected American peak of 10.1%. As Hervé Boulhol, head of the France desk at the OECD, told Mr Schwartz in early July, “There has been a lag with unemployment, but now it will start to bite.”

Customers in Japan, South Korea, and the US have already bought all the gas to be produced at the Sakhalin II plant over the next 20 years. Obviously pleased with Shell’s performance, Prime Minister Putin told Mr Van der Veer, “The work goes on successfully and ahead of schedule. We will have a chance to diversify our cooperation.” For his part, the Shell official said that his company was ready for more work, and that he hoped the necessary licenses and permissions to begin would be issued promptly. On the same day as the meeting in Moscow, Shell signed a deal with the Russian state-owned shipping company OAO Sovkomflot to build tankers for transporting LNG produced at Sakhalin II to Europe. Earlier in the month, Gazprom’s CEO Alexei Miller said his company was considering inviting Shell to participate in LNG projects on the Yamal peninsula in western Siberia. › Shell is not the only Western company to be tapped by Russia for assistance in exploiting its challenging oil and gas fields. On 24 June, the French ‘supermajor’ Total and the Russian gas firm Novatek agreed to invest some $900mn in joint development of a gas field in western Siberia. The deal was the first major foreign investment in Russia’s energy sector to be announced this year. And Total, together with Norway’s Statoil Hydro, is working with Gazprom on the huge Shtokman field in the Barents Sea. Russia has also invited foreigners to help develop the Arctic shelf off its Pacific coast. French economic stimulus Fast off the mark, but with a care for la beauté The Organisation for Economic Cooperation and Development expects the gross domestic product (GDP) of France to drop only 4% from the peak of the current economic cycle, far less than the 7.4% plunge expected in Germany. The OECD, the Paris-based intergovernmental research and policy advisory agency for the world’s industrialised countries, also says that French economic decline is likely to be significantly milder than in Spain, Belgium, and Britain. To offer another comparison, the American economy is expected to shrink by 3.5% before starting to grow again. What explains these discrepancies? Nelson D Schwartz is the European economics correspondent of the New York Times, reporting on companies and economic trends on the Continent. He attributes the definitely brighter outlook from his office in Paris

80

S eptember 2009

www.read-tpt.com

›