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France urges Germany to boost investment spending
October 20, 2014 / 7:06 AM / 3 years ago

France urges Germany to boost investment spending

BERLIN (Reuters) - French Economy Minister Emmanuel Macron has called on Germany to spend an additional 50 billion euros on investments over the next three years to support the European economy, according to comments that appeared in the Monday edition of the Frankfurter Allgemeine Zeitung (FAZ) daily.

Macron and French Finance Minister Michel Sapin are due to visit Berlin on Monday for talks with their German counterparts.

France is under pressure to secure EU backing for its 2015 budget, which flouts its past deficit-cutting commitments, while Germany faces criticism for failing to spend more and support the faltering euro zone economy.

In the FAZ, Macron urged Germany to offset the 50 billion euros ($63.67 billion) in savings that Paris has announced.

“50 billion euros savings for us, and 50 billion euros extra investment for them - that would be a good balance,” Macron said, noting that demand in Europe was too weak and budget consolidation should not be overdone.

“It is in our collective interests that Germany invests,” he said, adding Germany could do so without derailing its budget plans.

The German government has said it intends to spend around 5 billion euros more on transport and infrastructure in this legislature, but Chancellor Angela Merkel has made clear that there is next to no room for more public investment given her government’s promise to balance the federal budget next year.

That stance was echoed by German Finance Minister Wolfgang Schaeuble over the weekend. He said that he wanted to increase investment spending but not at the expense of the balanced budget goal.

Economy Minister Sigmar Gabriel, a Social Democrat (SPD) who has set up a panel of experts to study how Germany can boost its weak investment levels, also rejected calls for a stimulus program in Germany, saying the economy remained strong despite slowing momentum.

Hit by the effect of crises abroad, a weak euro zone and limp domestic demand, Germany slashed its growth forecasts to for this year and next earlier this month.

Reporting by Alexandra Hudson; Editing by Noah Barkin

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