North-South divide continues as industrial production falls in Italy and Spain "We expect industrial activity to remain a drag for growth at least in the first half of 2013," she said. On a monthly basis, production decreased by 0.8pc. Many economists expect Italy's recession, already the longest since 1993, to continue into the first half of 2013. By contrast, French industrial production bounced back in February, gaining 0.7pc percent from the previous month as manufacturing activity provided the main driver of growth, statistics institute Insee said. However, on an annual basis, industrial production fell 2.8pc. Data this week showed that German industrial output also rebounded, suggesting that the divide between the 17-nation bloc's northern and southern economies continues. Production rose 0.5pc on a monthly basis in February, reversing January's 0.6pc fall, according to the German economy ministry. Christian Noyer, France's central bank governor, said on Wednesday that France must freeze pensions, benefits and civil servant salaries in order to save €40bn by 2014 and hit an EU deficit target. Christian Noyer said that France had to come up with €40bn euros in savings this year and next to reach the EU deficit limit of 3pc of gross domestic product (GDP). He said that Paris had to have "the same level of spending" in 2014 as in 2012. "We are not in austerity, we are confronted today with the need for a very strict management of the public finances because our public deficit is too high," Mr Noyer told Europe 1 radio. Generally speaking we don't have any choice. We cannot continue expanding the deficits and debt and dumping it on future generations," he insisted. On Tuesday, the Bank of France confirmed its forecast for first-quarter GDP growth of just 0.1pc. Pierre Moscovici, the country's finance minister, said in February that France would ask its EU partners and the European Commission for an extra year to cut its public deficit below 3pc of GDP, and would outline new savings measures soon.