Election needs more reform, less demagogy

2nd April 2007, Comments 0 comments

BRUSSELS, April 1, 2007 (AFP) - French presidential candidates are ignorring or distorting economic realities in their campaigns, EU economic chief Joaquin Almunia told AFP, regretting their lack of political courage to make painful reforms.

BRUSSELS, April 1, 2007 (AFP) - French presidential candidates are ignorring or distorting economic realities in their campaigns, EU economic chief Joaquin Almunia told AFP, regretting their lack of political courage to make painful reforms.

"Sometimes I hear arguments that do not take account of economic reality, which are not based on economic data, which ignore what's happening in European economies," the economic and monetary affairs commissioner said in an interview, without citing any names.

"For the sake of their credibility and sending citizens clear messages, I think economic and political leaders need to recognise reality and not change reality for the brief benefit of more or less demagogic arguments," he added.

Campaigning for the first round of the election on April 22 has been marked by a strong sense that France is under-performing and that many of the economic and social policies of the last two or three decades have become outdated.

The frontrunner, conservative Nicolas Sarkozy, answer has been to call for the ECB to weaken the euro to make exports more competitive and has vowed to block foreign products benefitting from unfair regulatory advantages or artificially low exchange rates.

Socialist candidate Segolene Royal has also attacked the ECB for not focusing more on supporting growth and jobs and has promised to lift social spending and raise the minimum wage.

However, Almunia urged the candidates to seize on the currently favourable economic conditions to reform the economy, especially by focusing on raising employment levels and improving productivity.

"There is a whole series of structural policies that are more easily implemented in periods of economic growth like the one we are living in now, but from a political point of view we forget sometimes to do them," he said.

Although the French economy is riding the wave of a broader European economic upswing, its growth trailed its European partners last year, rising only 2.1 percent compared with 2.6 percent for both Germany and the 13-nation eurozone.

"To increase the growth potential, the level of employment needs to be increased," Almunia said.

"At the same time, policies and strategies for increaseing productivity need to be increased," he added.

Implicitly attacking France's controversial 35-hour work week, he also said that productivity should not be simply increased on an hourly basis "because if you increase hourly productivity, but you reduce the number of working hours, the result is nil."

He also warned that France was not getting as much out of its huge spending on social services as other EU countries, especially Nordic members, but he voiced satisfaction that the country's huge public debt was a serious issue in campaigns.

Copyright AFP

Subject: French news

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