Germany’s Schaeuble defends French debt decision

DEFICIT DEBATED::France said even with an extension it would not relax efforts to reduce public debt, while some criticized such a move as sending the wrong message


Mon, May 06, 2013 - Page 15

German Minister of Finance Wolfgang Schaeuble has defended the European Commission’s (EC) decision to give France two more years to meet the EU’s deficit target of 3 percent.

In an interview with Germany’s Bild newspaper, set to appear in yesterday’s edition, Schaeuble said the EU’s growth and stability pact “allows a certain flexibility in applying the rules.”

He added though that “the Commission and the [German] government are in complete agreement that there must not be any relaxing of [economic] reforms.”

The EC offered France extra time after its spring forecasts painted a pessimistic picture of the French economy over the next two years, with its deficit set to rise sharply.

For its part France on Saturday said even with a two-year extension it would not relax efforts to reduce public debt.

“There is no question of easing the effort to reduce spending,” French Finance Minister Pierre Moscovici told reporters.

However, in Berlin some members of German Chancellor Angela Merkel’s coalition were not in favor of Brussels’ decision.

“It is a bad sign. I don’t see that France is engaged in reforms. Giving more time [to France] is the same as saying, ‘continue like that,’” Michael Stuebgen, head of European issues in the conservative parliamentary group, told the German weekly Focus.

German Minister of Economics Philipp Roesler, called European Commission President Jose Manuel Barroso “irresponsible” in his handling of Europe’s budgetary policy.

“It’s irresponsible when a European Commission president puts in question the policy of budgetary consolidation in the EU countries,” Roesler said.

In order to fight the debt crisis, “we must boost growth, and consolidate the budgets. We have to make cuts,” Roesler said, adding that Germany has set “a good example ... We don’t spend more, but less.”