The French President has used a gathering of economists, business leaders and political figures at the OECD in Paris to send a message to Europe.
On the day the French government admitted its public debt and deficit would be higher than planned and fleshed out plans for six billion euros in extra taxes and 14 billion in spending cuts for next year, Francois Hollande said imposing harsher measures on the stagnating economy would be counter-productive.
He told the OECD audience: “The policy that I’m putting forward is one of budgetary seriousness. It is indispensable. We must become competitive again, but we must also seek growth. And that can be achieved through a re-orientation of the priorities of Europe.”
If the European Commission likes the fiscal plans, Paris will get more time to meet the three percent deficit target, but the latest International Monetary Fund forecast sees the French economy contracting by 0.1 percent this year, which would make that target much more difficult to reach, particularly as more government cuts hit consumers.
Alain Couttolenc, Managing Director of Nielsen Watch Europe, told euronews things are getting worse: “Now the consumer is affected in the day-to-day spend. We saw that was already the case in the automotive industry and in the construction industry; usually the consumer cuts first the big spends and then the small ones, so I think we’re reaching the point where they [will] cut their daily spend.”
Hollande’s message seems to be directed particularly at German Chancellor Angela Merkel; so what does she think?
Asked about Wednesday’s data from the French government during a news conference in Berlin, Merkel, whose lenience is particularly sought by Paris, said she wished France success because of its importance for eurozone stability.