France urged Germany on Thursday to grant it more time to hit its public deficit-cutting target, but denied it was turning into the new “sick man of Europe” even as data pointed to a deepening French downturn, reports The Globe and Mail.
France has acknowledged it will miss a 2013 goal of bringing its deficit down to 3 per cent of output and wants its EU partners – and notably Germany, the euro zone’s largest economy – to give it another year to meet the target.
Speaking at an event in the border city of Strasbourg to mark the Franco-German partnership, Finance Minister Pierre Moscovici asked his German counterpart Wolfgang Schaeuble not to risk hobbling the French economy by insisting on more austerity.
“I need Germany to understand this,” he said, adding that he knew Schaeuble – who was also at the event – would understand this appeal because Germany “needs a strong France” by its side.
But Schaeuble deflected the call by insisting that Berlin did not see budgetary rigour as incompatible with growth.
“We need to stop this debate which says you have to choose between austerity and growth,” he said, while adding that growth was nonetheless “indispensable.”
Paris and Berlin have long differed on what dose of fiscal discipline is needed in the currency bloc, which is struggling to return to economic health after a 2008-2009 downturn that was compounded by a sovereign debt crisis.
Berlin, anxious to see southern Europe get its finances in order, fears that euro zone countries will start easing belt-tightening efforts. Paris on the other hand frets about the impact of budget cuts on weak economies.
Read more of this report from The Globe and Mail.