PARIS (AP) — President Nicolas Sarkozy cut short his vacation Wednesday and promised to cut France's huge debts in response to rising concerns that the country's triple A debt rating could be cut.
He announced no new austerity measures, and the pledge to stick to existing commitments wasn't enough to keep shares in French banks plummeting in mid-afternoon trading on the Paris stock exchange over worries about the bond rating and the European debt crisis.
French bank Societe Generale's shares plunged more than 20 percent at one point, while stock in BNP Paribas was off nearly 10 percent and Credit Agricole fell more than 14 percent.
Sarkozy unexpectedly returned from the French Riviera on Wednesday morning and summoned key government ministers for an emergency meeting after days of mounting warnings from analysts that the world's fifth-biggest economy can't afford to keep bailing out poorer European states.
France's growth rates are slowing after years of failing to deliver on promises to reduce a deficit that stood at 7.1 percent last year.
The government is aiming for a deficit of 5.7 percent of national income this year and 4.6 percent in 2012, goals that analysts increasingly see as unrealistic.
Sarkozy said he's asked Finance Minister Francois Baroin to prepare a list of measures to guarantee the government attains its deficit-reduction targets. Sarkozy will take a decision on which measures to implement at an Aug. 24 meeting with his prime minister, budget minister and Baroin.
"We will take the necessary measures to reach these goals," Baroin said, without elaborating.
Sarkozy reiterated his call for a constitutional change requiring balanced budgets and insisted that "commitments to reducing the deficit are inviolable and will be maintained."
His comments appeared to only have a negligible affect on the spread between German and French bond yields, which has risen to 15-year highs.
"With yields now above those of the Netherlands, Finland and Austria, France seems in danger of slipping out of the core to become more closely associated with the eurozone's periphery," said Jennifer McKeown, senior European economist at Capital Economics.
Cecile Brisson in Paris and Geir Moulson in Berlin contributed to this story.
Copyright 2011 The Associated Press.