Thursday

22nd Feb 2018

Germany points to France's deficit commitments

  • France is to pass budget cuts and reforms worth €50bn on Tuesday (Photo: Moyan Brenn)

France's new finance minister Michel Sapin on his first trip to Berlin on Monday (7 April) gathered support for more reforms and budget cuts, but was referred to the European Commission on a deficit deadline postponement.

Sapin and his German counterpart, Wolfgang Schaeuble, tried to put up a united front in a joint press conference after the meeting.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

They emphasised the things they agree upon – banking union, a financial transaction tax, more competitiveness, more growth.

Schaeuble said they "get along well" and "value each other".

"We may not have the same political ideas," said the German centre-right politician about his Socialist counterpart. "But Franco-German cooperation is beyond that, we have a firm democratic commitment irrespective of the result of elections."

Sapin even joked that when people are confused about the former economy and finance ministry now being split in two, he explains: "I am the French Schaeuble."

But pleasantries aside, the elephant in the room and recurring question from journalists was Sapin's first announcement as finance minister – that he will seek an extension to the already-delayed deadline for France to meet the EU deficit target of three percent of GDP.

The EU commission last year gave France a two-year extension to bring its deficit below three percent from 4.3 percent in 2013.

Schaeuble said this was not a topic for discussion and pointed to Sapin's reassurances that France will stick to its commitments.

Sapin said this was something to negotiate with the EU commission – a first occasion being at the end of the week in Washington when the acting economics commissioner, Siim Kallas, will participate along with Schaeuble and Sapin at the International Monetary Fund's spring meeting.

The new French finance minister emphasised his government's commitment to make economic reforms and budget cuts, with a €50 billion package of measures being put to the parliament's vote on Tuesday.

"I wanted to inform the German finance minister what the French government decided and will announce tomorrow in a confidence vote in the Parliament," Sapin said, stressing that the reforms package is linked to the survival of the newly reshuffled government.

He said the lesson learned from the bruising local elections result was that the government needed to move "faster and more coherently" on reforms.

But he also talked a lot about a "balance" that needed to be struck between budget cuts and measures to boost the meagre economic growth that has returned to France.

Schaeuble seemed pleased. "France knows its responsibilities and this was confirmed today. We don't give each other grades, we know we need each other and Germany needs a strong France. When the responsibility pact was announced earlier this year by President Hollande, Germany said it was a good measure and we support France on this path," he said.

Meanwhile, Olli Rehn, the economics commissioner who just stepped down to campaign for an MEP post, said that France should not be given special treatment compared to other countries just because it is a large economy.

Former Eurogroup chief Jean-Claude Juncker – currently lead candidate of the centre-right in the EU elections – also said that "France should comply to the same rules and agreements that apply to Cyprus, Malta and others".

The head of the German Bundesbank, Jens Weidmann, also said that France is a model for how the new rules on budgetary discipline are applied. "That's why we should insist in pointing out to France its commitments in this regard," he said.

French Socialists bruised in local elections

France's ruling Socialists have suffered a bruising defeat in local elections, with the centre-right claiming victory and the anti-EU National Front making further gains – a possible preview of the upcoming EU elections.

Analysis

France falls victim to EU's economic powers

Being singled out for censure by the European Commission is nothing new for the government of Francois Hollande. But the timing of the latest veiled threat from Brussels could hardly be worse.

Baltic states demand bigger EU budget

The leaders of Estonia, Latvia, and Lithuania say in a joint letter that they are open to talks on creating "new own resources" for a bigger EU budget after the UK leaves the EU.

EU-Latin America trade talks move to 'endgame'

Senior negotiators in the EU-Mercosur talks will meet in Brussels on Friday to work out the technical bits of a possible trade deal, after top political officials gave the talks a final push.

Analysis

We are not (yet) one people

Talks on the next EU budget will start on Friday. Brussels wants to do much more than before – and needs a lot more money. But arguing about funds won't be enough.

News in Brief

  1. Belgian PM to host 11 EU leaders ahead of summit
  2. Tusk all but rules out pan-EU candidates in 2019 elections
  3. Tusk: EU budget agreed before 2019 elections 'unrealistic'
  4. Commission fines car cartels €546m
  5. Juncker: 'nothing' wrong in Katainen meeting Barroso
  6. Juncker appoints new head of cabinet
  7. MEPs decide not to veto fossil fuel projects list
  8. Factory relocation risks drawing Vestager into Italian election

Stakeholders' Highlights

  1. Aid & Trade LondonJoin Thousands of Stakeholders of the Global Aid Industry at Aid & Trade London
  2. Macedonian Human Rights Movement Int.European Free Alliance Joins MHRMI to End the Anti-Macedonian Name Negotiations
  3. International Climate ShowSupporting Start-Ups & SMEs in the Energy Transition. 21 February in Brussels
  4. Mission of China to the EUChina-EU Tourism Year to Promote Business and Mutual Ties
  5. European Jewish CongressAt “An End to Antisemitism!” Conference, Dr. Kantor Calls for Ambitious Solutions
  6. UNESDAA Year Ago UNESDA Members Pledged to Reduce Added Sugars in Soft Drinks by 10%
  7. International Partnership for Human RightsUzbekistan: Investigate Torture of Journalist
  8. EPSUMovie Premiere: 'Up to The Last Drop' - 22 February, Brussels
  9. CESICESI@Noon on ‘Digitalisation & Future of Work: Social Protection For All?’ - March 7
  10. UNICEFExecutive Director's Committment to Tackling Sexual Exploitation and Abuse of Children
  11. Nordic Council of MinistersState of the Nordic Region 2018: Facts, Figures and Rankings of the 74 Regions
  12. Mission of China to the EUDigital Economy Shaping China's Future, Over 30% of GDP

Latest News

  1. UK seeks flexible transition length after Brexit
  2. Commission defence of Barroso meeting leaves 'discrepancies'
  3. MEPs bar WMD and killer robots from new EU arms fund
  4. Canete gets EU parliament pension while still commissioner
  5. Bank of Latvia sends deputy to ECB amid bribery probe
  6. We are not (yet) one people
  7. Intellectual property protection - the cure for Europe's ills
  8. Eastern states push back at rule of law conditions on funds

Stakeholders' Highlights

  1. Macedonian Human Rights Movement Int.Suing the Governments of Macedonia and Greece for Changing Macedonia's Name
  2. Dialogue PlatformBeyond the Errors in the War on Terror: How to Fight Global Militarism - 22 February
  3. Swedish EnterprisesHarnessing Globalization- at What Cost? Keynote Speaker Commissioner Malmström
  4. European Friends of ArmeniaSave The Date 28/02: “Nagorno-Karabakh & the EU: 1988-2018”
  5. European Heart NetworkSmart CAP is Triple Win for Economy, Environment and Health
  6. European Free AlllianceEFA Joined the Protest in Aiacciu to Solicit a Dialogue After the Elections
  7. EPSUDrinking Water Directive Step Forward but Human Right to Water Not Recognized
  8. European Gaming & Betting AssociationGambling Operators File Data Protection Complaint Against Payment Block in Norway
  9. European Jewish CongressEJC Expresses Deep Concern Over Proposed Holocaust Law in Poland
  10. CECEConstruction Industry Gets Together to Discuss the Digital Revolution @ the EU Industry Days
  11. Mission of China to the EUChina-EU Relations in the New Era
  12. European Free AlllianceEnd Discrimination of European Minorities - Sign the Minority Safepack Initiative