PARIS, France - January 9, 2012 - French savers are squirrelling away their spare cash at the fastest rate in nearly 30 years, putting a drag on consumer spending in the eurozone’s second-biggest economy while helping its banks’ balance-sheets.

Even in the best of times France is among the most thrifty nations in the developed world, but the threat of Europe’s debt crisis spreading to France has savers running for the perceived safety of bank accounts and becoming more wary of life insurance policies exposed to volatile markets.

“Luckily it’s not going under mattresses; it’s still going into bank accounts, thank God. But this is the first phase of a liquidity crisis,” said Cyril Blesson, a savings economist at consultancy Pair Conseil. “People are preferring to put their money into cash or even non-interest bearing accounts while there is also a lot of money going into tax-free and taxable savings accounts.”

France’s economy, which many economists consider to be in Depression, is far more dependent on consumer demand to underpin its growth than its northern neighbor Germany, which can count on surging exports for its strength.

With unemployment claims at a 12-year high, French households are preparing for a rainy day despite a generous social safety system to provide for them when they retire or lose their jobs.

French savers have been piling into French banks just as professional investors have been pulling money out of their stocks on concerns about their exposure to troubled euro sovereign debtors and their reliance on wholesale funding.