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France calls on Germany to invest in eurozone

October 19, 2014

Ahead of a visit to Berlin, two French ministers have called on Germany to invest 50 billion euros. It is the same amount by which Paris is to reduce public spending.

Paris Michel Sapin Emmanuel Macron 15.09.2014
Image: Alain Jocard/AFP/Getty Images

French Finance Minister Michel Sapin (pictured, right) and Economy Minister Emmanuel Macron (left) are due in Berlin on Monday to discuss investments and growth in the eurozone.

Ahead of the visit, Macron was quoted in the Frankfurter Allgemeine Zeitung as saying: "Fifty billion euros ($64 billion) savings for us and 50 billion of additional investment by you - that would be a good balance."

France has pledged to reduce its public spending by 50 billion euros to meet the EU budget deficit ceiling by 2017.

With high unemployment and low growth, France does not expect to comply with European Union budget deficit rules until 2017. It sees a deficit rising to 4.4 percent of gross domestic product (GDP) this year and 4.3 percent next year. The shortfall will not come down to the EU limit of 3 percent of GDP before 2017.

Within the eurozone, both France and Italy want to spend more to boost their economies. "It's in our collective interest that Germany invests," Macron said.

But in Germany balancing the federal state budget for the first time since 1969 is being seen as a priority. Finance Minister Wolfgang Schäuble acknowledged in comments to the Welt am Sonntag newspaper that Germany "must invest more and improve our competitiveness" but added: "We just don't want growth on credit."

As Europe's largest economy, Germany has come under pressure from the International Monetary Fund (IMF), among others, to increase private and public investment to help prevent stagnation in the eurozone.

jm/rc (AFP, AP)