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ECONOMY

France’s Macron ‘must show example’ on deficit: EU commissioner

France may no longer be the eurozone's deficit "dunce" but President Emmanuel Macron must do more to improve the country's finances "if he wants to be the leader in Europe", the EU's economy commissioner said on Sunday.

France's Macron 'must show example' on deficit: EU commissioner
President Emmanuel Macron at a press conference on Friday. PHOTO: LUDOVIC MARIN / AFP
France has long been in the EU's crosshairs over its deficit, which has repeatedly overshot an EU limit of three percent of gross domestic product.
 
Macron, who is pushing for a profound transformation of the EU, has slashed public spending in a bid to restore France's credibility, driving down the deficit to an estimated 2.9 percent in 2017 — the first time in a decade it will come in at under three percent.
 
In an interview with France's Europe 1 radio Economic Affairs Commissioner Pierre Moscovici urged Macron not to rest on his laurels and to continue reforming France's big-spending ways.
 
“Emmanuel Macron wants to be… the leader in Europe and to be the leader in Europe, you must show example,” he said.
 
“Three percent is not a target, it's an absolute limit,” the former French economy minister said, adding that while he was satisfied his country was no longer the “dunce” of the eurozone its deficit was still far in excess of the eurozone average.
 
“The average deficit in the eurozone is not 2.8 or 2.7 percent it's 0.9 percent,” he noted.
 
The French government has forecast a deficit of 2.8 percent in 2018 — a figure seen as somewhat optimistic by Brussels which expects it to remain at 2.9 percent before inching back up to 3 percent in 2019.
 
“France is doing better, it is doing better on its deficit, it is doing better on growth. But France must aim very high, it must aim for the top spot,” Moscovici, a Socialist, urged, calling for a “very strong deficit reduction”.
 
His call comes at the end of a week in which France's Court of Auditors — the public spending watchdog — also warned that the eurozone's second-biggest economy was not on a sound footing deficit-wise.
 
“Even with a deficit under the three percent limit, France still has one of the worst financial situations among almost all its eurozone partners,” the court's president Didier Migaud warned, calling for faster structural reforms.

ECONOMY

Sweden’s new right-wing govt slashes development aid

Sweden, one of the world's biggest international donors, is planning drastic aid cuts in the coming years, the country's new right-wing government said in its budget bill presented on Tuesday.

Sweden's new right-wing govt slashes development aid

Prime Minister Ulf Kristersson’s government said it planned to reduce the country’s international aid by 7.3 billion kronor ($673 million) in 2023, and by another 2.2 billion kronor in 2024.

That is around a 15-percent reduction from what had been planned by the previous left-wing government and means Sweden will abandon its foreign aid target of 1 percent of gross national income.

International aid for refugees will be capped at a maximum of eight percent of its aid, and will also be reduced.

According to the specialised site Donor Tracker, Sweden was the world’s eighth-biggest international aid donor in terms of absolute value last year, and the third-biggest in proportion to the size of its economy, donating 0.92 percent of its gross national income, behind Luxembourg and Norway.

The new government, which is backed for the first time by the anti-immigration Sweden Democrats, had announced in its government programme last month that it would be cutting foreign aid.

Since 1975, Stockholm has gone further than the UN’s recommendation of donating at least 0.7 percent of its wealth to development aid.

Despite its growth forecast being revised downwards — the economy is expected to shrink by 0.4 percent next year and grow by 2 percent in 2024 — the 2023 budget forecasts a surplus of 0.7 percent of gross domestic product.

It calls for an additional 40 billion kronor in spending, with rising envelopes for crime fighting and the building of new nuclear reactors, as well as a reduction in taxes on petrol and an increase in the defence budget.

The new government is a minority coalition made up of Kristersson’s conservative Moderates, the Christian Democrats and the Liberal party, backed in parliament by their key ally the Sweden Democrats to give them a majority.

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