Hollande Misunderstands French Economic Woes, Merkel Ally Says

Socialist presidential candidate Francois Hollande fails to understand France’s economic shortcomings and risks doing more harm than good with his spending plans, a senior lawmaker from Chancellor Angela Merkel’s party said.

“Herr Hollande has misunderstood the problems in his country and in other euro area countries,” Michael Meister, the deputy caucus chairman of Merkel’s Christian Democrats, said in a phone interview in Berlin today. “If one throws money into a country with structural problems that won’t solve those structural problems. In fact, one makes the problems worse.''

Meister said that he supports structural reforms for the individual economies in the euro area to iron out imbalances and make them more competitive and not stimulus spending. He proposed using money from the European Union budget that is already directed to member states and “prioritizing those payments to ensure they spur economic growth” as structural reforms are carried out.

Merkel’s government “strictly” opposes “pumping more money into economies,” Meister said. “It would more likely make the implementation of the fiscal compact more difficult,” he said. “The aim is to gain control over excessive debt, not increase it.’’

To contact the reporters on this story: Rainer Buergin in Berlin at rbuergin1@bloomberg.net; Brian Parkin in Berlin at bparkin@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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