France’s economy: Austerity stakes

FRANCE’S finance minister, Pierre Moscovici, staged a charm offensive in London this week to improve his country’s battered economic image. Days after the European Commission had forecast that France would miss its budget-deficit target of 3% of GDP in 2013, a key promise of President François Hollande’s, Mr Moscovici urged people to look beyond “simplistic stereotypes”. The government may miss its target, he said, but it was making structural reforms to restore competitiveness and sound public finances.The commission’s verdict was sobering. French GDP will grow by 0.1% this year, compared with a government forecast of 0.8%, and the deficit will reach 3.7%. After long defending the 3% target as a sign of its credibility, and insisting on overly ambitious growth forecasts, the government has abruptly switched message to plead for more time. And the commission clearly intends to opt for indulgence.Without much struggle, it seems, France has won the argument that it should not be punished for its failure. It blames poor growth—the commission forecasts a euro-zone recession in 2013—and fears that more belt-tightening might make things worse. The French claim that,…

The Economist: Europe

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