The latest numbers from Insee, the national statistics institute show France missed its deficit target of 4.2% in 2013 by 0.1 percentage points. Public spending is also up. Spending now amounts to over 57% of GDP with debt reaching 93.5% of GDP.
The debt and deficit numbers are despite the fact that France’s overall tax burden is 46% among the highest in Europe. France is collecting money, but what is it doing with it? The answer of course is wasting it on socialist dreams.
François Hollande’s Deficit Plea Sets up Clash with Brussels
Today, France is pleading for more time to hit its deficit targets. Amusingly, Interior Minster Arnaud Montebourg, claims the European Commission is “totally useless on the question of growth“.
This puts president François Hollande on a Major Clash Path with Brussels.
President François Hollande has made clear he wants Brussels to give his new French government more time to hit its already delayed budget deficit targets, setting up a potential clash with the European Commission and hardline partners such as Germany and Finland.
Announcing the appointment of Manuel Valls as prime minister on Monday night following a heavy local election defeat for his ruling Socialist party, Mr Hollande said the new government “will have to convince” Brussels that its plans to boost growth “must be taken into account” in terms of its budget targets.
Arnaud Montebourg, the leftist industry minister who is expected to continue to occupy a key role in the new government, weighed in on Tuesday, saying the commission was “totally useless on the question of growth”.
He added: “With the choice of Manuel Valls and a fighting government, we have the chance of reorienting Europe. At the moment it is Europe that reorients us towards austerity and dogma when what we need is pragmatism.”
The line from Paris echoes the stance taken by Matteo Renzi, Italy’s prime minister, whose government has also set growth and jobs as its top priority. Both France and Italy are currently under a Brussels regime of “specific monitoring” of their public finances because of slippage in their efforts to cut their budget deficits and reduce public debt.
Germany and Finland recently issued a strong rebuke to the commission for giving France and Spain more time to meet the EU’s deficit limit of 3 per cent of gross domestic product.
France was last year granted an extra two years to 2015 to meet the 3 per cent target. But the commission has already estimated that Paris will not achieve this.
In Rare Agreement with Montebourg
For the first time ever, I find myself in agreement with Montebourg. Yet, I propose a truncation of his statement to make it more accurate. The EC is not just “totally useless on the question of growth” but rather, the EC is “totally useless” period.
Of course Montebourg is totally useless as well, and so is Hollande’s entire administration. Actually, they are worse than useless, and proof is in the negative results.
Finally, please note the irony in Montebourg’s praise of Manuel Valls.
Manuel Valls stands on the right of the party and his appointment comes despite strong leftwing pressure for Valls to abandon his recent pro-business policy shift according to the Financial Times.
Mike “Mish” Shedlock