France steps up calls for Germany to boost investment

BERLIN - French and German ministers met in Berlin on Monday, amid calls on Germany to do more to boost growth in Europe, while France faces a battle in Brussels over its budget.
The meeting comes at a crucial time for Paris, which is at loggerheads with Brussels over its 2015 budget as it is likely to overshoot targets once again.
French economy and ministers Emmanuel Macron and Michel Sapin were welcomed by their German counterparts Sigmar Gabriel and Wolfgang Schaeuble for a mini-summit in preparation for a wider EU gathering at the end of the week. The four ministers were scheduled to hold a joint press conference later.
According to a report in the weekly Der Spiegel, Germany is helping France to draw up a pact with the European Commission on deficit reduction and structural reforms to win Brussels’ approval of the 2015 budget plans.
Ahead of the mini-summit, Sapin and Macron called on Germany to increase investment by 50 billion euros ($64 billion) in the next three years to match the amount Paris is seeking to save from public spending.
“Fifty billion euros savings for us and 50 billion of additional investment by you — that would be a good balance,” Macron told the Frankfurter Allgemeine Zeitung on Monday.

“It’s in our collective interest that Germany invests.”
- German growth engine stalls -
Recent data has suggested that the German economy — traditionally Europe’s growth engine — is stalling, threatening to pull the eurozone back into recession and put the brakes on the global recovery.
And France, grappling with sky-high unemployment and a ballooning budget deficit, has been spearheading a campaign for Germany to soften its stance on fiscal austerity and loosen its purse strings to provide much-needed stimulus.
But Berlin remains adamant that the only way out of crisis is for eurozone countries to get their finances in order by sticking to agreed rules on the size of their deficits.
Asked by the mass-circulation daily Bild whether Europe should abandon the path of austerity, Economy Minister Gabriel said: “No.
“But the money we spend on Europe can be put to better use — for investment in research and development, in a fast Internet and in saving energy,” he conceded.
French President Francois Hollande’s government has refused to approve further spending cuts needed to meet the EU’s budget deficit target before 2017, arguing that more austerity would only further slow a stagnating economy.
Berlin is concerned about the lack of progress in Paris in getting its finances in order and in reforming its economy, but has refrained from making any public comment in recent weeks on the French budget so as not to antagonise its key ally and trading partner.
On Sunday, Macron said he was “absolutely sure” that Brussels would not veto the French budget, which is expected to post a 4.3-percent deficit in 2015 — overshooting the 3.0-percent ceiling set by the EU.

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