Yahoo: Netherlands: Germany and France jeopardize pact - by Robert Wielaard
Netherlands: Germany and France jeopardize pact - by Robert Wielaard
The Netherlands charged Tuesday that France and Germany are running their economies so differently that they are threatening the rules that underpin the stability of the euro. Dutch Finance Minister Wouter Bos said France and Germany "are sending different signals about how they regard the necessity to put public finances in order." He told reporters that it was "worrisome" that neither Berlin not Paris will acknowledge publicly that they are taking vastly different paths to return their slumping economies to growth. That, he added, was eroding confidence in the euro budget rules that require governments to contain debt within certain limits. While the German government has advocated limiting debt and bringing government spending back in line, French President Nicolas Sarkozy has said "he sees no reason to commit himself in that sense" and plans to allow the deficit widen to stoke growth, Bos said. "That kind of nonintervention can have devastating effects" on the euro stability rules at a time when most of the 16 euro-zone nations have budget gaps far exceeding the limit of 3 percent of gross national product, he said.While the German government has advocated limiting debt and bringing government spending back in line, French President Nicolas Sarkozy has said "he sees no reason to commit himself in that sense" and plans to allow the deficit widen to stoke growth, Bos said.
"That kind of nonintervention can have devastating effects" on the euro stability rules at a time when most of the 16 euro-zone nations have budget gaps far exceeding the limit of 3 percent of gross national product, he said.
Labels: Economy, EU, euro, France, Germany, Netherlands, Sarkozy, Wouter Bos
