European Commission chief Jean-Claude Juncker on Monday (8 May) called on France’s incoming president Emmanuel Macron to cut public spending, saying its current policies involved too much money going to wrong things.
“We have a real problem with France,” Juncker said in Berlin one day after Macron’s resounding electoral win.
“The French spend too much money and spend it on the wrong things.”
He said between 53 and 57% of France’s gross domestic product went toward public spending.
“That can’t go well in the long run with relatively high debt,” Juncker warned, indicating that Macron could not rely on the good will of his key European partners for too long.
“France is going to have to compromise with others… Germany is not alone in speaking out about a policy of stability — there are other countries too,” he told reporters.
France is under huge pressure to get its budget in line with the EU’s strict deficit rules after enjoying several delays from Brussels in the past several years.
Germany, for its part, cherishes its balanced budget and fiscal prudence, even as Chancellor Angela Merkel has promised to do what she can to make Macron’s presidency a success.
Expectations are high that France will miss its targets in 2017, with the European Commission set to unveil its latest forecasts for the French economy and the rest of the European Union on Thursday.
In February the Commission forecast that France would end this year with a deficit of 2.9% of GDP, just under the three percent limit set by Brussels.
But the French government unveiled new spending since then and the Commission warned that in 2018 France would be back above the red line to 3.1% of GDP.
Macron has pledged to slash public spending by €60 billion over the next five years, in part by cutting 120,000 public sector jobs.
But he has also urged European-wide reforms and a shift in focus away from rigid fiscal discipline.
Juncker, who was in Berlin for the launch of a book by German Foreign Minister Sigmar Gabriel, also expressed reservations about Macron’s calls for a common budget, parliament and a commissioner for the 19-country eurozone.
“Not all euro member states agree that someone based in Brussels or somewhere else should call the shots on budgets instead of national parliaments,” he said.