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France: EU can't give us orders

Staff writer |
Germany is pressing France to pursue an economic overhaul in return for getting more time to cut its budget deficit but French President Francois Hollande says that nobody will dictate to him.

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German Chancellor Angela Merkel and French President Francois Hollande said after the meeting they agreed that France has to make further efforts to match Germany's higher competitiveness but two countries don't agree about approach.

After the European Commission gave France two extra years to bring its budget below the ceiling at the same time as recommending an economic revamp, Ms. Merkel said fiscal leeway must be accompanied by reform. Mr. Hollande said that while the commission was "doing its job" in making recommendations, "the measures we take, the modalities of how we do it, are the responsibility of the French government."

The differences in thinking underscored the difference between Germany and France as they attempt to take a common position on tackling record unemployment and recession in the euro area.

Mr. Hollande and Ms. Merkel produced a joint statement by their two governments pledging to disbursement of $7.8 billion already agreed to combat youth unemployment. The statement put aside binding commitments on measures to boost competitiveness until EU countries have agreed on a set of benchmarks. The statement proposes a "full-time president" of the group of euro-area finance ministers as one step toward "stronger governance in the euro zone."

Their two countries share the common goal but Ms. Merkel told Mr. Hollande that the path of reform was unavoidable.

"We agreed to the commission's giving France two more years to meet the deficit target of 3 percent coupled with the expectation — and the French president just confirmed that - that reforms are undertakenThe two things go hand in hand," said Ms. Merkel.

"I am the first to have raised the issue of how far France has fallen behind Germany in international trade. Don't try to find any contradiction between what France and Germany seek on budgets and growth. There is not a confrontation between us. We share the same goals," said Mr. Hollande said.

However, French President said that the Brussels-based European Commission, the EU's executive body, won't "dictate" to France.

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