France must stick to deficit cutting course: Schaeuble

BERLIN Thu Feb 28, 2013 7:44am EST

German Finance Minister Wolfgang Schaeuble pauses during a Reuters interview in Berlin February 27, 2013. Schaeuble said on Wednesday that Italy's inconclusive weekend election had raised the risk of market turmoil spreading to other euro countries and urged Italian politicians to form a stable government quickly. REUTERS/Tobias Schwarz

German Finance Minister Wolfgang Schaeuble pauses during a Reuters interview in Berlin February 27, 2013. Schaeuble said on Wednesday that Italy's inconclusive weekend election had raised the risk of market turmoil spreading to other euro countries and urged Italian politicians to form a stable government quickly.

Credit: Reuters/Tobias Schwarz

BERLIN (Reuters) - France has a special responsibility for ensuring stability in Europe and must continue on its deficit reduction course even after signaling that it will miss its target for this year, German Finance Minister Wolfgang Schaeuble said in an interview.

Speaking days after the French government acknowledged it would talk to EU officials in Brussels about pushing back its deficit-cutting timetable, Schaeuble signaled that Berlin could live with such a delay.

But he also issued a cautionary message to France that deficit reduction and structural reform must remain a top priority.

"France and Germany have a special responsibility. Together they form a strong core in Europe," Schaeuble told Reuters.

"Ten years ago, governments in France and Germany played a decisive role in weakening the Stability and Growth Pact. This can't happen again under any circumstances. I have full confidence that France will meet its obligations."

Schaeuble was referring to a loosening of the pact under former French President Jacques Chirac and German Chancellor Gerhard Schroeder. The German government now says the move helped contribute to the euro zone crisis by signaling to other member states that it was fine to break the rules.

Schaeuble, a francophile who grew up near the Black Forest along the French border, rejected the suggestion that Germany may soft-pedal on closer euro zone integration as the crisis eases and a German election looms.

Chancellor Angela Merkel and French President Francois Hollande have said they will present joint proposals on moving towards a so-called "fiscal union" in May, a month before a summit of EU leaders.

"Germany wants to move forward with France wherever it's possible," Schaeuble said.

"As far as our plans for May go, the main question is how we can strengthen European decision-making and boost growth on a sustainable basis through structural reforms."

(For other news from Reuters Euro Zone Summit, click here)

(Reporting by Michael Stott, Gernot Heller and Noah Barkin)