AMSTERDAM, March 12 (Reuters) - The Dutch and German central bank presidents on Thursday criticized the French government for running budget deficits for too long, and warned that current the low-interest rate environment may be lulling politicians into complacency.
Klaas Knot of De Nederlandsche Bank said that France is on track to break European budget rules in “14 out of 19” years of the euro’s existence.
“For each individual year you can try to come up with an explanation of an extraordinary severe recession or an extraordinary circumstance, but I think it is the accumulation of these exceptions which is undermining the rules,” he said at a press conference in Amsterdam.
In Frankfurt, Bundesbank President Jens Weidmann warned that the current low interest rates brought on by the European Central Bank’s purchasing of government bonds are exceptional.
“Cheap government financing conditions should not cause governments to believe that further reforms are not needed,” Weidmann said.
“That goes not only for the countries affected by crises but also for big countries like France and Italy.” (Reporting By Toby Sterling; Editing by Toby Chopra)