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French Finance Minister Michel Sapin and Economy Minister Emmanuel Macron said after talks in Berlin October 20 with German Finance Minister Wolfgang Schäuble and Economy Minister Sigmar Gabriel that they agreed steps aimed at budget consolidation and investment. Yet German lawmakers say they see little scope to alter the country’s draft 2015 budget to boost state spending on infrastructure projects.
Germany and France aim to present “very precise” investment plans on Dec. 1, while France will try to cut its deficit, Sapin told reporters after the talks. Amid euro bloc economic growth that’s “too low,” both nations “need to act,” said Macron, adding that “Germany has more capacity to invest than France.”
German lawmakers said Sapin and Macron may wind up empty handed if they expect Berlin’s parliament to add new spending items to next year’s budget. Germany is sticking to plans to balance its 2015 budget, a goal that leaves little scope to raise state investment before the program is sealed on Nov. 13.
Anyone hoping that last week’s market turmoil might drive Germany and France to take decisive action to spur growth in the eurozone was disappointed on Monday. After meeting here, top ministers from the two nations agreed only to work on a plan they will present in December.
With concern rising that the eurozone is slipping into recession, and the European Central Bank and the International Monetary Fund calling on eurozone leaders to do more for the economy, expectations were high that leaders meeting in Berlin might reach a grand bargain.
The German government was expected to agree to invest more in public works if France took steps to improve growth through measures like relaxing labor rules.
But a full six years after a global financial collapse from which the eurozone has still not fully recovered, Monday’s meeting was a reminder of the incremental way that policy plays out in Europe, even in the face of crisis. In the European Union’s loose confederation, national leaders try to maintain a precarious balance between their change-averse voters and the impatient demands of international financial markets.
Often, as in Berlin on Monday, problems are not so much solved as referred to a study group.
Wolfgang Schäuble and Sigmar Gabriel, the German finance and economics ministers, and their counterparts Michel Sapin and Emmanuel Macron, said at news conference here on Monday that they would not present any specific proposals until a meeting planned for Dec. 1.
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