Brussels, 19/02/2013 (Agence Europe) -During a visit to the European Parliament on Tuesday 19 February, Peer Steinbrück, an SPD candidate in the German general elections in September, called for France to be given more time to meet its budget targets.
If the French deficit is 3.2% or 3.4% of GDP in 2013, then France should be given flexibility in the timing for bringing its public deficit back below the 3% cut-off point, said Steinbrück, and similar flexibility in interpreting the Stability and Growth Pact rules should be greatened to any country that makes huge budget consolidation efforts but is finding it difficult to meet budget targets due to low growth. Countries in receipt of financial aid, like Ireland and Portugal, should be given longer repayment times for their loans.
Reacting to the financial crisis, the European Summit decided upon Germany's instigation to set a budget policy focussing on budget consolidation, said Steinbrück, but the problem with this ever more pro-cyclical policy, he said, was that struggling economies simply sink deeper into crisis. He slammed the pauperisation of the Greek people and warned against turning the economic crisis into a political crisis by driving voters into the arms of extremist parties, whether on the left or the right.
Steinbruck, formerly the German finance minister, said that to get out of crisis, the necessary budget consolidation must be balanced and intermeshed with targeted investment in growth opportunities. He said that fighting against youth unemployment should be a priority, describing the situation in Spain and Greece as explosive and asking how young people without any prospects for the future could be expected to vote for democracy or for Europe. He said financial regulations must be tightened up, especially for banks and the European Stability Mechanism should only be used to help countries, with funding provided by banks themselves used to bail out banks. (MB/transl.fl)