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French PM calls for European investment plan to boost growth
August 15, 2014 / 7:01 PM / 3 years ago

French PM calls for European investment plan to boost growth

PARIS (Reuters) - France’s prime minister called on Friday for steps to be taken at EU level to boost economic growth through investment, a day after data showed that both France and the euro zone stagnated in the second quarter.

“The situation is difficult, growth is slowing, not only in France but in the whole euro zone,” Manuel Valls told French media on the sidelines of a World War II commemoration ceremony.

He pledged to press ahead with France’s plans to cut public spending by 50 billion euros over the next three years, saying the government would not change course, adding: “We also need investment initiatives at European level.”

France slashed its growth forecasts for both 2014 and 2015 on Thursday and acknowledged it would miss its public deficit target this year, saying poor growth and low inflation in Europe were partly to blame.

The government, which has long called for the European Union to focus more on growth than austerity, also hinted that it would probably not manage to come into line with the EU’s deficit ceiling of 3 percent of GDP next year.

Both the German government and European Central Bank policymaker Jens Weidmann have over the past weeks rebuffed France’s calls for Berlin to step up investments to boost growth.

Incoming European Commission President Jean-Claude Juncker has promised to push for a 300-billion-euro public-private investment program over the next three years, combining EU money with private sector funds, to build energy, transport and broadband networks.

Reporting by Ingrid Melander; Editing by Susan Fenton

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