Opposing views between France and Germany

Πηγή: New Europe
By KARAFILLIS GIANNOULIS
April 5 2013

The Finance ministers of France and Germany, Pierre Moscovici and Wolfgang Schaeuble met on April 4. Moscovici, asked from Germany to boost demand, while Schaeuble insisted that Member States should restore their financial order. The finance ministers spoke to students at government and management school ENA in Strasbourg.

“Right now, all countries are consolidating, which means hitting the budgetary brakes, even in countries running surpluses,” Moscovici said. However, indirectly he asked from Germany to focus on growth policies as he stressed that “If we all hit the brakes together, we all get stuck together.” On the other hand, Schaeuble replied that the debate between austerity and growth in Europe is not substantial. “We need to stop this debate which says you have to choose between austerity and growth,” the German finance minister said and added “growth is indispensable.” In addition, Schaeuble rejected the term austerity and he stressed that in Germany they simply call it “deficit reduction.”

However, Moscovici asked from Germany to understand that deficit reduction in France needs to be gradually done. He underlined that the French government cannot cut the national deficit below the EU limit of 3 per cent in 2013 as this would put the country into a recession. “No one can deny that there’s a link between austerity and unemployment. What this government asks for is a re-balancing of policies toward growth,” the French minister stressed.

The national finances of France and Germany are not the same as the budget deficit in Germany will be near balance in 2014 while the country runs a trade surplus. On the other hand, the French government has said it won’t hit its target of bringing its deficit down to 3 per cent during 2013 because the cuts would push the country into recession.

Overall, during the speech of the two ministers the lack of consensus between France and Germany regarding the economic policies in EU Member States was observable.