Germany Rebuffs Hollande Call to Do More to Boost French GrowthRainer Buergin
German Chancellor Angela Merkel’s deputy spokeswoman rejected French President Francois Hollande’s plea for Europe’s biggest economy to take extra steps to stimulate growth at home and in the region.
Hollande said in an interview this week with French newspaper Le Monde that while he’s not asking Germany for “indulgence,” he wants more to be done to boost growth.
“Germany is already the most important engine of economic expansion in the euro zone,” Christiane Wirtz, deputy government spokeswoman, told reporters today in Berlin. “The rather general statements coming out Paris provide no indicator for the government to correct any of its economic policies.”
The French economy stagnated in the first three months of this year and jobless claims have risen in every month except two during the past three years. Hollande is facing criticism from French business leaders over the country’s economic decline relative to euro-region peers.
“We’re not soliciting any indulgence from Germany, but we do ask for a firmer support for growth,” Hollande told Le Monde in an interview conducted during a ceremony commemorating the 100th anniversary of the beginning of World War I. “Its trade surpluses and its financial situation allow it to invest more than it does. That’s the best service that Germany can render to France and to Europe.”
Moody’s Investors Service this week cut its French growth forecast for 2014 to 0.6 percent, less than the 1 percent Hollande is counting on to reduce the budget deficit, which the International Monetary Fund expects to amount to 4 percent of gross domestic product in 2014 and 3.4 percent in 2015 before falling below the euro region limit of 3 percent in 2016.
German Finance Minister Wolfgang Schaeuble has said that France has already gained backing to delay fulfillment of the euro area’s deficit criteria and it’s now up to the country to stick to its pledges to avoid a third delay.