Current finance minister Sapin, perhaps unsurprisingly, has admitted thatFrance will miss EU deficit targets and needs more time to rein in public finances - proclaiming, as Reuters reports, that it may take until 2017 to bring it in line. Germany's response "nein, nein, nein" with Merkel demanding EU nations stick to commitments (rejecting any plans to 'bend rules') and Schaeuble blasting that Germany is "certain France is aware of its responsibilities." But the real stunner is that as France shows its utter ineptitude in managing an economy, EU President Juncker has placedformer French finance minister Moscovici in charge of Europe's taxes and finances. German lawmakers exclaimed this is "not a wise personnel decision." The core splinters...
France is failing hard... (as Reuters reports)
France announced on Wednesday it was breaking the latest in a long line of promises to European Union partners to cut its public deficit, conceding it now would take until 2017 to bring its finances in line with EU rules.The statement by Finance Minister Michel Sapin follows weeks of hints by Paris that weakness in the euro zone's second largest economy would prevent it bringing the deficit below the EU ceiling of three percent of output next year as promised.Sapin insisted France was not seeking to change or suspend the rules but wanted the deteriorating outlook for growth and inflation this year and next to be taken into account.Paris has led calls for a more flexible interpretation of EU budget regulations along with Italy,"Let France's position be clear: in the European debate now open, we are not seeking a change of European rules, we are not seeking their suspension, nor any exception for France or other countries."We are asking that everyone takes into account the economic reality we are all facing - that growth that is too weak, inflation that is too low."
But... German Chancellor Angela Merkel has rejected any bending of the rules and said on Wednesday euro zone countries should stick to their commitments.
"The (European) Commission is right to keep up pressure for solid budgets and reforms," she told parliament in Berlin. "What applies for Germany also applies unchanged for Europe."
And Germany's finance ministry adds:
German Finance Minister Wolfgang Schaeuble on Tuesday rebuffed calls for Berlin to spend more to boost the euro zone economy, insisting on the need for painful structural reforms.
- *GERMAN MINISTRY 'CERTAIN' FRANCE 'AWARE OF ITS RESPONSIBILITY'
- *GERMAN MINISTRY SAYS EUROPE NEEDS FRANCE TO HAVE STRONG ECONOMY
Upholding the EU deficit-busting rules will now fall to Sapin's Socialist predecessor, Pierre Moscovici, an advocate of Keynesian demand-led economics, who was appointed European Commissioner for economic and monetary affairs in the new EU executive team unveiled on Wednesday.
Germany is not happy:
- *GERMAN CDU LAWMAKER BARTHLE SAYS MOSCOVICI NOMINATION NOT A WISE DECISION
German lawmaker Norbert Barthle from Chancellor Angela Merkel’s Christian Democratic Union says appointment of Pierre Moscovici as European Union Economic and Monetary Affairs Commissioner not “a wise personnel decision.”In e-mailed statement, Barthle also says:“It will be interesting to see how Mr. Moscovici will deal with France’s excessive deficit”“It’s now up to the commission to assess a delayed adherence to the 3% deficit limit and, where appropriate, take further steps against the country”“This is where Mr. Moscovici can show that he really represents the interests of Europe”
* * *
So put the socialist fox in charge of the money hen house... what could go wrong?
But you shouldn't worry, because:
- EU'S MOSCOVICI SAYS IN INTERVIEW WITH FRANCE'S LES ECHOS NO EXCEPTIONS CAN BE MADE FOR FRANCE ON BUDGET
- EU'S MOSCOVICI SAYS FRANCE'S DEFICIT REDUCTION PLANS NEED TO BE EXAMINED OVER A LONG-TERM PERIOD
Yep - no exceptions... except we'll use a long-term average that enables an exception for France - because that's what's fair.
Credit to Zero Hedge
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