Steinbrueck Urges Flexibility for France on Deficit Deadline

France and other countries struggling with recession and unemployment deserve extra time to meet deficit-reduction targets, said Peer Steinbrueck, German Social Democratic chancellor candidate.

I “would not raise any conflict for example in the case of France when they cannot reach the 3 percent target next year,” Steinbrueck told reporters in Brussels today. The European Commission will issue its next economic forecasts on Feb. 22.

Steinbrueck said he will “carefully” weigh an aid package for Cyprus. While he doesn’t underestimate the country’s importance, it must also clamp down on money laundering, scale back its banking sector, raise its corporate tax rates and introduce a European-wide financial transaction tax, he said.

Steinbrueck said big banks and investors have held Europe’s crisis management hostage by, for example, dumping bonds in reaction to possible writedowns on government debt. However, he declined to speculate on future such “haircuts.”

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