November 7, 2019 / 12:43 PM / a month ago

Macron says euro zone deficit debates belong to another century

PARIS, Nov 7 (Reuters) - French President Emmanuel Macron has urged European countries to stop focusing on budget deficit rules in order to invest more and compete with China and the United States.

Macron, who early in his presidency made a priority of pushing the French budget deficit below the EU-mandated 3 percent limit, hurting his popularity, said it was now time for Europe to loosen the purse strings to prepare for the future.

“We need more expansionist policies, to invest more. Europe cannot be the only area not to do it. That’s why I think the debate about the 3% for national budgets, and the 1% for the European budget, belongs to another century,” Macron told The Economist in an interview.

French policymakers are growing increasingly frustrated as their German counterparts waver over whether to launch a budget stimulus package to pull Europe’s biggest economy back from the brink of recession.

Buoyed by tax cuts earlier this year and less exposed to international trade, France’s economy has so far held up much better than Germany, traditionally Europe’s economic powerhouse.

Macron said the cost of under-investing was that Europe was no longer competing in the same league as America and China when it came to cutting-edge technology such as artificial intelligence.

“Europe is one of the continents with the most savings. A large part of these savings is used to buy U.S. Treasuries. So with our savings, we are paying for the United States’ future, and we’re weakening ourselves. That’s absurd,” Macron said. (Reporting by Michel Rose Editing by GV De Clercq and Catherine Evans)

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