France tells EU to adapt budget rigour to protect growth

8th October 2014, Comments 0 comments

French President Francois Hollande on Wednesday urged the European Union to ease its rules on budget discipline to protect flagging growth in the troubled eurozone.

"We have to adjust budgetary policy in relation to the challenge of growth," Hollande said on his arrival for a brief informal summit with other EU leaders.

The French leader said the issue would be discussed at a full European Council later this month, setting the scene for a head-on clash with German Chancellor Angela Merkel.

Merkel has made it clear she will not countenance any easing of the requirement for EU governments to bring budget deficits under three percent of GDP and to keep them there.

Last week, France announced that it would fail to meet that target until 2017 and ruled out any further spending cuts, effectively publicly flouting the agreed ground rules for the single currency on the grounds that further cutbacks would only slow the faltering economy further.

That message was hammered home here by Hollande. "If everyone imposes austerity, which is not the case of France, there will be an even greater slowdown of growth," the Socialist leader said.

The European Commission is currently considering whether to use new powers it acquired last year to force France to rewrite its controversial budget.

© 2014 AFP

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