"I’m not going to just wait for growth to happen; I’m going to go out and grab it - with my teeth." When Nicolas Sarkozy made that signature pledge, shortly after his election, millions of French citizens were sceptical. But a vast majority were also willing to give their new president the benefit of the economic doubt.

Not anymore.

If Sarkozy still intends to honor his post-election pledge, he’s going to need one heck of a good dentist. That’s because grabbing growth with your teeth is an extremely risky proposition these days – unless you have a solid pair of dentures.

More than a year after an obscure term from the US home-buying lexicon – "subprime" – became a byword for economic distress, the global slowdown is continuing its forced march across the planet, claiming new victims along the way.


No longer immune to financial flu

Until recently, the conventional wisdom was that the worst of the economic turmoil would somehow bypass Europe. The line of thinking went: No, we’re not totally immune from the US contagion, but we’re unlikely to catch a full-blown flu. 

If Europe was seen as more resistant, economists chalked it up to the fact that Europeans had been generally more prudent and risk-averse in the management of their financial affairs, and thus not as prone to the violent seizures seen in the reckless, free-wheeling American economy.

Now that the 15-nation euro zone is officially in contraction – growth across the bloc declined by 0.2% from April to June – the tone has radically changed. Suddenly, Europe is not only NOT impervious to the slings and arrows of US misfortune – but some are even musing that Europeans – led by Spain, the UK and Italy – could end up taking the greatest hit.

Here in France, where growth swung into reverse in the second quarter, contracting 0.3%, the government is pulling out all the stops to create the impression that it is hard at work trying to find solutions to a problem that it says is not entirely of its own making. 

In a country where working in August is often seen as a subversive gesture, Prime Minister François Fillon has cut his summer holiday short to convene an emergency brainstorming session with his top economic officials. 

The intended message to his compatriots is that your government is in the trenches, in the heat of summer, battling to shore up your purchasing power.


Don't say the R-word

Going into the meeting Monday, the country’s finance minister, Christine Lagarde, tried to keep everyone from reverting to panic-attack mode. She pointed out that neither France, nor Europe, are in recession (as some have suggested) since that would require two straight quarters of negative growth – which hasn’t happened yet. She also stressed the global – as opposed to strictly, national – nature of the downturn. 

France, to be sure, has company in economic misery: Growth fell half a percent in Germany in the second quarter, and 0.3% in Italy, while remaining essentially stagnant in Spain, edging up 0.1%.

But critics say that Sarkozy still deserves a good share of the blame for his country’s predicament, singling out a 13 billion euro package of fiscal reforms passed last year as a major albatross around the French economy. Sarkozy’s populist edge has kept him – and his officials – from using the word “rigor” in economic policy pronouncements. That could soon change.

But the main factors dragging on French growth prospects are seen elsewhere in the euro zone: sagging consumer morale, tight credit, less investment by individuals and companies, and a widening trade deficit.

Fillon is not promising any quick fixes to France’s plight on Monday. Rather, he is hoping to offer an analysis of how things got to this point and how the situation might be addressed in the near future.

But most in the government remain optimistic that as the economy slowly limps back to its feet, France is likely to escape from the danger zone… by the skin of its teeth.