Brussels, 17/09/2014 (Agence Europe) - The French Commissioner-designate for Economic and Financial Affairs and Taxation, Pierre Moscovici, has promised that he is not going to be showing any favouritism to his own country, despite the latter failing to reduce its public deficit.
In an interview with the FT, published on Wednesday 17 September, Moscovici stated, “If I was too indulgent or complacent to France, my credibility and the credibility of the commission would be immediately ruined. This is something I must absolutely avoid. That doesn't mean I have a duty of ingratitude; that's not the point. But I've got a duty of objectivity”.
The former finance minister applied his country's economic policy up until last spring and will be given a hearing on Thursday 2 October by the European Parliament's economic and monetary affairs committee. If he manages to escape this test unscathed, he will be put in charge of monitoring the budgetary policies of member states and ensuring application of the Stability and Growth Pact in a context characterised by sluggish growth and very low inflation (see other article). His first major appearance will coincide with the Commission's presentation at the beginning of November, of its assessment of the national budget projects for 2015, which member states will have to send him before the middle of next month.
At the end of August, during the European summit, France fought hard to obtain the highest level of political recognition for its exceptional economic situation in Europe (see EUROPE 11144). In the summit conclusions, the EU28 expressed their deep concern about the low level of economic recovery, exceptionally low inflation and unacceptably high unemployment levels, despite improvements on the financial markets and the structural reforms undertaken by member states. The French finance minister, Michel Sapin, echoed these sentiments last Friday in Milan, during the informal Ecofin Council (see EUROPE 11155).
In addition to recognising the exceptional nature of the economic situation, France will also have to demonstrate that in 2014 it made sufficient efforts in terms of structural reforms and that these will continue over the next few years, if it is to benefit from a third additional deadline to bring its deficit to below the 3% ceiling. This is effectively what Sapin promised in Milan, by reiterating the French government's objective of reducing spending by €50 billion by 2017 (€21 billion of which by 2015), reducing the financial burden on companies, and introducing labour market reforms. On Tuesday, the French prime minister, Manuel Valls, won a vote of confidence by a small majority in the national parliament on this so-called policy of supply.
In response to the request by European leaders to apply the flexibility included in the Pact, Moscovici did indicate that he would apply a “certain dose” of flexibility. This will consist of granting member states more time to reduce their deficits in exchange for introducing reforms and excluding certain public spending from the deficit calculation. He also stated, “we're not obliged to apply the rules stupidly or rigidly. We can have a dose, a certain dose of flexibility”. He is convinced that the “reforms” to make savings and promote job creation will be made. (MB)