France aims for more public deficit cuts

PRESIDENT Nicolas Sarkozy ordered his finance and budget ministers tofind new ways to prune the public deficit, as markets fretted over France’s strained finances and banks following a US debt downgrade.

Shares in French banks — among the most exposed to Italian and other peripheral eurozone government debt — slumped in afternoon trade as fears about the currency bloc’s debt crisis moved back to the forefront of investors’ concerns.

Sarkozy — who played a leading role in frantic diplomacy over the weekend aimed at halting two weeks of market turmoil — had earlier summoned his top ministers and central bank chief to emergency talks, interrupting the summer recess.