Monday

25th Jun 2018

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.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... our join as a group

"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.

Greece and creditors proclaim 'end of crisis'

After late-night talks, the Eurogroup agreed on a €15bn disbursement and debt relief measures for Greece, while setting out a tight monitoring when the bailout ends in August.

Greek bailout exit takes shape

At a meeting next week, eurozone finance ministers and the IMF are expected to agree on new cash, debt relief measures, and a monitoring mechanism to ensure that Greece can live without international aid for the first time since 2010.

Opinion

The risks behind the 'green bond' boom

The EU should not overuse the financial system in order to achieve environmental goals, or it risks the emergence of a green bond bubble which would be detrimental to the financial sector and hinder the achievement of climate targets.

Opinion

Eurozone needs institutional reform

Both the examples of Greece and Italy test the limits of a system with inherent weaknesses that feeds internal gaps, strengthens deficits and debts in the European South, and surpluses in the European North respectively.

News in Brief

  1. EP civil liberties committee votes for Article 7 on Hungary
  2. Report blames 2017 egg scare on lax EU enforcement
  3. Nine countries to sign up for Macron's military initiative
  4. Re-elected Erdogan potentially in power until 2028
  5. Macron's popularity drops among French pensioners
  6. Tajani calls for €6bn investment to halt migration
  7. Major demo in London for second EU referendum
  8. Venice Commission: Hungary should repeal NGO law

Stakeholders' Highlights

  1. UNESDAThe European Soft Drinks Industry Supports over 1.7 Million Jobs
  2. Mission of China to the EUJointly Building Belt and Road Initiative Leads to a Better Future for All
  3. Macedonian Human Rights MovementMHRMI Launches Lawsuits Against Individuals and Countries Involved in Changing Macedonia's Name
  4. IPHRCivil society asks PACE to appoint Rapporteur to probe issue of political prisoners in Azerbaijan
  5. ACCASocial Mobility – How Can We Increase Opportunities Through Training and Education?
  6. Nordic Council of MinistersEnergy Solutions for a Greener Tomorrow
  7. UNICEFWhat Kind of Europe Do Children Want? Unicef & Eurochild Launch Survey on the Europe Kids Want
  8. Nordic Council of MinistersNordic Countries Take a Stand for Climate-Smart Energy Solutions
  9. Mission of China to the EUChina: Work Together for a Better Globalisation
  10. Nordic Council of MinistersNordics Could Be First Carbon-Negative Region in World
  11. European Federation of Allergy and AirwaysLife Is Possible for Patients with Severe Asthma
  12. PKEE - Polish Energy AssociationCommon-Sense Approach Needed for EU Energy Reform

Latest News

  1. Progressive CAP alternative only hope for sustainability
  2. Ponytailed green MEP joins 'the other side of the table'
  3. EU leaders still in search of migration plan
  4. Migration row at centre of EU summit This Week
  5. Merkel's woes cast shadow on EU's future
  6. Europe's tech race - trying to keep pace with US and China
  7. Merkel and Juncker's mini-summit risks fiasco
  8. Greece and creditors proclaim 'end of crisis'

Join EUobserver

Support quality EU news

Join us