French Finance Minister Michel Sapin says that France is the “victim of clichés”
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French Finance Minister Michel Sapin says that France is the “victim of clichés”

Speaking in Brussels, he admitted, however, that there might be “some truth” in such clichés. Despite what is often said and written he also said that France is “reforming”, adding “but reforms require careful negotiation and have to be phased in gently so as to last and avoid social conflict.”

“For example, we are reducing burdens on companies, simplifying layoff procedures, which in turn make it easier to hire staff, and we are making cuts in public spending,” Sapin explained.

MEPs, nonetheless, have criticized France’s budget deficit, growing public debt, pension costs (14% of the budget), low retirement age (61) and below-average GDP growth.

Sapin said, “France has a long term vision and it will respect the objectives it set for itself. But it cannot take measures that would destroy growth. We raised the effective retirement age from 58 to 61 and we plan to go further.”

He also said that France would bring its sovereign debt will be below 100% of GDP”.

Asked whether the current Economic and Monetary Union treaties suffice to deal with the economic challenges facing Europe, Sapin said “We have to move forward within the framework of the current treaties. Flexibility is part of this”. But there is room for further economic convergence, too, he added.

On Greece’s financial plight, he said, “Greece is a full member of the European Union, the Eurogroup, the EIB and the IMF. It must respect its commitments, but these are not carved in stone. If the Greek government wants to make changes, it will need to compensate with other measures”.

France’s deficit narrowed slightly to 4.0 percent of annual output last year,  according to the European Union’s statistics office, confirming French figures which have allowed Paris to reduce its deficit target for this year.

France’s deficit in 2014 slipped by 0.1 percentage point from 4.1 percent in 2013, Eurostat said last month.

France cut its budget deficit target for 2015 in March and said economic growth could beat the government’s official 1 percent forecast. The government had been forecasting an increase to 4.4 percent.

The comments by Sapin came in an economic dialogue exchange with the Economic and Monetary Affairs Committee of the European Parliament. 

By Martin Banks