France’s economic woes are the result of poor policy choices at home and Paris should stop blaming its problems on the strength of the euro, center-right candidate for European Commission president Jean-Claude Juncker told reporters in an interview.
The former prime minister of Luxembourg and long-time head of the Eurogroup forum of eurozone finance ministers spoke days after French Prime Minister Manuel Valls described the strong euro as a threat to French economic growth and jobs.
Valls, a Socialist, urged the European Central Bank (ECB) to adjust policy to weaken the single currency, which reached a two-and-a-half year high just below US$1.40 on Thursday before comments from ECB President Mario Draghi pushed it lower.
Photo: EPA
France, the second biggest economy in the eurozone, has been dogged by high unemployment and weak growth, casting doubt on its ability to meet EU-mandated deficit targets.
The economic weakness was behind French President Francois Hollande’s decision to reshuffle his government last month, bringing in Valls.
“I don’t believe France is the sick man of Europe,” Juncker said after an EU election campaign appearance in Berlin on Thursday. “But I do caution against looking for the causes of what is partly the result of [its] own mistakes somewhere other than at home.”
Juncker, 59, said the strong currency had created problems for a number of eurozone member states, but that its level was the same for all.
“If France has a tougher time than other countries, then the reasons for this are to be found in France, not in exchange rates,” he said.
Speaking earlier, Juncker suggested that the German economy was doing better than France’s because it was run by a center-right leader.
Juncker is the lead candidate for the European People’s Party (EPP) in scheduled May 25 elections for the European Parliament. His main rival for the presidency is Social Democrat Martin Schulz, a German.
In comments that may be more warmly received in France, Juncker also backed the idea of European “industrial champions,” saying governments should use planemaker Airbus SAS as a model in promoting tie-ups across other sectors.
In the past weeks, the French government has intervened to prevent US conglomerate General Electric Co from taking over the energy assets of French rival Alstom SA, by encouraging Germany’s Siemens AG to make a counter-bid.
Paris has argued that a transaction with Siemens has the potential to create two European champions — one in energy, the other in trains. However, Alstom’s management would clearly prefer to sell to GE, and Siemens seems lukewarm on the idea of a deal.
In the interview, Juncker defended the right of governments to intervene in corporate deals that affect their interests, describing Airbus — the Toulouse-based commercial jet manufacturer created by France and Germany as a rival to Boeing Co — as a success story to be copied.
“When the opportunity presents itself to put a [national] champion on a broader footing, we should try to launch European champions,” Juncker said. “Governments shouldn’t decide for companies, but governments have an interest and a right to be part of such decisions.”
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