French Finance Minister Pierre Moscovici said on Sunday that France's economy is expected to grow just 0.1 percent this year, a downward revision from the country's initial target. Moscovici, who is part of the Socialist goverment of Francois Hollande, was selected along with his party on the promise of more growth and less austerity.
Moscovici joined Marketplace Morning Report host Jeremy Hobson to discuss the state of the French economy and where it is headed in the future.
On why the French economy is struggling:
Moscovici: "I don’t think that’s the right question. The right question is, what is wrong with the euro zone economy? The problem is that the euro zone is the place that we live. It’s the countries that with we exchange more. And the difficulty is that the euro zone is going to have the second year of a recession, and it’s very difficult for a country like France to grow when its own environment is weak. So the question is, how can we hold together Germany, Italy, Spain, and furthermore the European Union countries, strengthen our growth, and grow together? This is the question for France. How to make the structural reforms internally, and to have a stronger economy and a better situation for the business, for the firms. And how to cooperate better between us for a stronger growth."
On whether interdependency in the euro zone is good or bad:
Moscovici: "Neither a benefit, neither a problem. It’s just a reality. We decided, more than 50 years ago, to unite our destinies, through the European Union. And 70 percent of trade is indicated into exchanges in the European Union. About 15 years ago, we decided to have a single currency -- the euro, which is a strong currency, now very important currency in the world -- the second most important after the dollar. What we must do now is again to grow together, to divine up our capacities, and to encourage competitiveness. That’s what we’re doing in France. I believe by the second half of 2013, we would be capable to regain growth. In the years to come -- 2014, 2015 -- to have a much stronger growth."
On austerity measures undertaken by the Hollande government:
Moscovici: "I think that reducing deficits is a common interest. A country with a higher debt is a weakened country. Every euro which is dedicated to finance public debt is a euro lost for economy or public service. This is why we must fight debt and fight it strongly. This is why too, since debt is composed of several deficits, we must reduce our deficit. And fiscal consolidation is a necessity. But we must not add recession to austerity, or austerity to recession."
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