French resistance to reform ‘like spitting in the wind’
Baku, May 16 (AZERTAC). France’s European partners stepped up pressure on President François Hollande to accelerate reforms, warning Paris that rejecting globalisation was “like spitting in the wind” after the eurozone’s second-biggest economy slid back into recession.
José Manuel Barroso, head of the European Commission, used a visit to Brussels by Mr Hollande to underline that a two-year delay to allow Paris to meet its EU-mandated budget deficit targets was conditioned on “credible” reforms being undertaken by France.
A senior German official said Berlin would back the deficit delay granted by the EU’s executive arm, but said the window for Mr Hollande to implement much-needed reforms to improve France’s declining competitiveness was closing quickly. The Commission will set out its recommendations for reforms on May 29.
The senior official said Berlin believed a recent rally in the French bond market was likely to be temporary, meaning Mr Hollande must act fast while France’s borrowing costs were artificially low and he had some flexibility to act.
Mr Hollande said at a later joint press conference with Mr Barroso that his socialist government had already implemented important reforms, but had more to do.
He and his ministers blamed the 0.2 per cent fall in output in the first quarter - the second successive quarter of negative growth - on the overall weakness of the eurozone. Mr Hollande rejected suggestions that France had become “the sick economy of Europe”, pointing out that most other eurozone countries had suffered worse recessions. He said he believed France had “passed the most difficult moment” - although he said growth over the year as a whole was likely to be zero.
A sobering report from Insee, France’s national statistics office, spelt out the depth of the malaise: production was at a “dead stop”, consumption “lacklustre”, investment “folding up” and exports “falling, again”. Purchasing power, vitally important in an economy heavily reliant on domestic consumption, dropped 0.9 per cent in 2012, the heaviest fall in 30 years.
Mr Hollande, suffering record low popularity ratings, is due on Thursday to hold a special press conference aimed at injecting new impetus into his year-old presidency.
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