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11/12/2016

Pierre Moscovici performs risky balancing act in French parliament

Euro & Finance

Pierre Moscovici performs risky balancing act in French parliament

Pierre Moscovici was interviewed by the French parliament on Tuesday 14 October. [Besion 2 Gauche/Flickr]

The French parliament interviewed future European Commissioner Pierre Moscovic on Tuesday, 14 October. Moscovici was forced to play a delicate balancing act between his current role as a legislator, and his new role as a European Commissioner, the day before France’s controversial budget proposal was due for inspection by the European Commission. EurActiv France reports.

Pierre Moscovici, who will soon take up his duties in the European Commission, faced his colleagues in the French parliament in his capacity as Commissioner for Economic and Financial Affairs.

This appears to be a first test for relations between the Commission and the French parliament. Pierre Moscovici has taken a hard line on the French budget deficit since his first European Parliament hearing, while Prime Minister Manuel Valls continues to call for greater national sovereignty on the issue. In a recent speech he stated that France was a powerful country that would not tolerate its budgetary policy being dictated from abroad.

>> Read: French budget attracts criticism from Europe (in French)

Danielle Auroi, President of the French parliament’s European Affairs Commission described it as “a great moment,” adding that “it is a big first to interview the Commissioner-designate and to be party to information on the new European Commission”.

A Commissioner sitting on the fence

“I am in a transitory position, I am still an MP,” the Commission candidate recognised. In May, President Hollande had tasked Moscovici with identifying the tools available to Europe for boosting the economic recovery; a report that is due within the next few weeks.

“In this report, you will make proposals in the name of France… but will you apply them in your role as Commissioner?” a French MP asked during the candidate’s latest hearing. This is a particularly sensitive issue, as the details of Jean-Claude Juncker’s 300 billion euro investment plan remain undisclosed.

Pierre Moscovici made an effort to distance himself from France, declaring that “when you become a European Commissioner, you have to see things from a different angle!” and insisting that he would henceforth defend the general interest of Europe.

“I will demand that the common rules are upheld: a European Commissioner must commit to promoting respect of the common rules, the rules that apply to all the member states. I will ensure that the Stability Pact is respected,” he stated.

Burying doubts

The future Commissioner expressed his anger at those who raised doubts about his partiality, saying “I was criticised for my nationality by certain French MEPs. This is unprecedented and regrettable. When one enters into the European Institutions, one detaches oneself from national debates!”

Interrogated over the role he will play in the French budget debate, Pierre Moscovici promised that he would not take part in any vote, saying he wished to avoid being “both the judge and the defendant”.

Non-punitive measures

He then expounded his interpretation of the rules on budgetary flexibility outlined in the European treaties, stressing that being flexible does not mean breaking the rules, but rather favouring a response on a national level above an intervention across the whole of the Eurozone.

“Here the European Commission has a certain amount of freedom. […] When I was Finance Minister, it was the Commission that proposed the two year extension [to bring the budget back under control]”, he said, implying that France itself had little to do with the decision. The Commission, he added, was rigorous in its practices, but not punitive.

Statistical manipulation ruled out

Moscovici firmly ruled out the idea of balancing the books by removing certain investments from France’s public deficit reduction programme. Some had suggested discounting contributions to the European budget, future investments or even defence in order to paint a more positive picture of French finances.

The President and Prime Minister have both expressed support for this idea, but not Moscovici.

“We do not have to be inflexible, because the system offers flexibility, but we also do not want to open the door to statistical manipulation,” he explained.

Taking the initiative on European taxes

On the subject of European fiscal integration, Moscovici said that “we have to take the initiative and focus on the financial transaction tax. Greater cooperation between certain states could help push forward common agreements”.

In the end, the Commission candidate appeared to satisfy his audience by successfully juggling sometimes paradoxical arguments. “As a continent we are experiencing low growth. We have to balance our response,” he insisted, adding that it was impossible to pay back debt without economic growth, and that weak inflation was causing real problems.

Background

France's deficit is fast becoming problem number one of the Eurozone. While many countries have tightened their belts by laying off civil servants and cutting pay, France has done neither. The country's public deficit remains very large, and the lack of economic growth diminishes the tax base.

Further Reading