Brussels, 03/12/2012 (Agence Europe) - German finance minister Wolfgang Schäuble and French finance minister Pierre Moscovici addressed the European Parliament's Economic and Monetary Affairs Committee on Monday 3 December about the two countries' policy for dealing with the challenges facing the eurozone and boosting growth in Europe.
The German minister said his country respected EU budget deficit rules and the problems with EMU had to be tackled systematically, one step at a time. He said that simultaneous progress could be made on cutting debt, structural reforms and introducing new bank rules, without causing further gaps between euro and non-euro nations. In Germany's view, debt reduction and structural measures are a prerequisite for growth stimulus. Schäuble said that in the face of global challenges and the technological revolution, Europe can only keep its position in the world if it invests in innovation and this requires healthy public finances, a reduction in debt and introduction of the necessary structural reforms, he said, adding the various countries would only accept these measures and sacrifices if enough pressure was applied on them, hence the need to change the treaties in the near future to give the EU greater powers to control national budgets. Schäuble added that his country had managed to return to growth by reducing debt and winning back the confidence of the money markets, and this example could be followed by the eurozone.
This message was echoed in part by the French finance minister, Pierre Moscovici, who said France was planning to follow a three-pronged approach - getting out of debt, competitiveness and Europe - to cut its large deficit and debt, boost growth and make good the losses in competitiveness over the past ten years. On the first approach, getting out of debt, France is planning to cut its budget deficit to 3% next year, reverse the debt trend in 2014 and restore structural equilibrium in public accounts for 2017. In the second area, competitiveness, he announced 35 measures (tax credits to companies to encourage investment and hiring, reform of the labour market and so on) to thoroughly reform the French economy and restore competitiveness over the next five years. On Europe, France has set four priorities: (1) solving the problems facing struggling nations with agreement on disbursement of cash for Greece marking a “turning point,” said Moscovici, for restoring confidence in the eurozone; (2) on banking union, the aim is to ensure that bank troubles do not automatically lead to sovereign debt problems, with this being achieved by facilitating approval later this year for legislation to this effect; (3) the Stability and Growth Pact; and (4) the eurozone, where France suggests that the eurozone be given budget powers separate from the EU27 budget, financed by autonomous resources for action in key domains like welfare, competitiveness and a eurozone system for unemployment benefit; the emission of pooled eurozone debt might also come under these new budget powers. France wants greater democratic scrutiny over decisions taken by national parliaments and the European Parliament (by a Parliament committee acting as a co-legislator) and a minister with executive powers within the eurozone). (FG/transl.fl)