France’s Michel Sapin rules out 2015 budget changes
France and Italy are already in the firing line, as one top Brussels-based economist explains.
“In Germany, the demand side should be strengthened and in France it should be productivity, supply. Unfortunately, there is big political resistance in France against the so-called structural reforms,” said Daniel Gros of the Centre for European Policy Studies.
“In Germany, the state doesn’t want to spend anymore, (which you can understand). However the consumer also doesn’t spend anything anymore and that companies don’t invest and that, of course, paralyses the entire national economy.”
Italy’s public finances also face scrutiny. Milan has been arguing that EU deficit reduction targets are made more flexible, to avoid further spending cuts. Budget surveillance in the Eurozone was brought in by EU member states in a bid to repeat the bloc’s recent debt crisis, which began because countries were living far beyond their means.