Sunday

24th Jul 2016

Hollande: Germany should do more to boost growth

  • Germany's Angela Merkel should do more to boost growth in Europe, says Paris (Photo: Council of European Union)

French President Francois Hollande has said Germany should do more to support growth as his government struggles to bring its budget deficit to within the EU threshold.

In an interview with Le Monde, published Monday (4 August), he indicated that France was undertaking reforms but needs more support.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

"We are putting in place the reforms announced but the rhythm of the efforts taken to reduce the deficit also depends on growth. We are not asking any leniency from Germany but we are asking that it does more to boost growth."

"Its trade surplus and its financial situation allow it to invest more. That would be the best thing it could do for France and Europe."

He made a similar call for action on the European Central Bank (ECB) saying there was a "real deflationary risk in Europe" and that inflation in France had never been as low as it is now.

"Weak inflation too has negative fiscal consequences on revenues as well as on debt. A lot will depend on the level of the euro, which has weakened over the past few days but not enough," Hollande said. "The ECB must take all necessary measures to inject liquidity in the economy."

The interview is being interpreted in French media as further ground preparation by Paris for warning its partners that it is likely to again have a budget deficit exceeding 3 percent of GDP.

France has already been given two years' grace, from 2013 to 2015, to meet EU rules but its efforts have been hampered by the country's poor economy.

The European Commission has forecast that it will miss its target next year. So far the French government has been insisting it will meet the EU goals but it has also increasingly called for flexibility.

Germany, for its part, is laying more emphasis on growth policies but has not abandoned its focus on reducing budget deficits.

The difference in policy outlook is highlighted by the simmering dispute about which portfolio France's next EU commissioner - Pierre Moscovici - should have.

France - repeated once more by Hollande in the Le Monde interview - is looking for a "large economic portfolio".

However Germany has baulked at Paris taking charge of the economic and monetary affairs dossier, which would give Moscovici discretionary powers over how the euro rules are applied.

German finance minister said the decision on who takes the portfolio is very "sensitive" and carries "symbolic weight".

Germany's mass-selling tabloid also recently weighed in on the debate with a columnist saying that "Moscovici made the euro as soft as French brie with his talk as French finance minister."

Moscovici hit back telling Der Spiegel that he had "initiated key reforms" while he was in office.

The division of portfolios for the next commission is only due to become public around the beginning of September. Other economic portfolios that Moscovici could be in line for include one on promoting growth policies.

Incoming EU commission president Jean-Claude Juncker has said he wants to initiate a €300 billion public-private investment programme to boost the European economy over the coming three years.

EU to tweak rules on Chinese 'dumping'

The EU Commission has tried to fudge the issue of whether China is a “market economy” amid efforts to protect European industry from cheap exports.

Court ruling puts Renzi bank plan in doubt

EU court ruling on bank bailouts has raised the likelihood of a political embarrassment for Renzi, months before a referendum puts his future and, potentially, Italy’s euro future on the line.

Stakeholders' Highlights

  1. Belgrade Security ForumMigration, Security and Solidarity within Global Disorder: Academic Event Agenda for 2016
  2. GoogleHow Google Fights Piracy: Creating Value While Fighting Piracy
  3. EJC"My Visit to Israel" - Opinion by MEP Lopez Aguilar, Chair of the EP Working Group on Antisemitism
  4. World VisionChildren Migrating, Out of School and at Work as Hunger Deepens in Southern Africa
  5. European Healthy Lifestyle AllianceStand-Up (and Exercise) to Prevent Chronic Diseases
  6. Centre Maurits CoppietersLaunches a Real-time News Hub Specialised in EU Stakeholders
  7. Dialogue PlatformFethullah Gulen Calls for International Probe Into Turkey Coup Allegations
  8. GoogleEU-US Privacy Shield: Restoring Faith in Data Flows and Transatlantic Relations
  9. World VisionWorld Leaders & Youth Advocates Launch Partnership to End Violence Vs. Children
  10. Counter BalanceReport: Institutionalised Corruption in Romania's Third Largest Company
  11. Access NowEuropol Supports Encryption. We Can Relax Now… Right?
  12. GoogleLearn about Google's projects across Europe on Twitter @GoogleBrussels

Latest News

  1. Munich attack might not have been terrorism
  2. A very British (and Corbynite) coup
  3. Poland 'changing for the worse' for Muslims and refugees
  4. EU aims to lift visas on Turks despite purge
  5. ECB in ‘bail-out’ of scandal-tainted VW
  6. EU failed to learn lesson from Brexit, Poland says
  7. UK accord on EU workers 'crucial', France says
  8. EU and US take different lines on Turkey crackdown