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France calls end of the austerity dogma

FXstreet.com (Barcelona) - French Finance Minister Pierre Moscovici is calling for an end to the austerity era following a more lenient approach offered by Germany and the European Council, both accepting last Friday an extension of two years for France to meet its public deficit targets, set below 3%. The gloomy economic prospects of the country let to take this decision.

According to Moscovici, cited by Bloomberg on an interview by Europe 1 radio over the weekend: “We’re witnessing the end of the dogma of austerity. We’ve been pleading for a growth policy for a year. Austerity on its own impedes growth. This is decisive, it's a turn in the history of the European project since the start of the euro."

He went on to add: "I don’t think about plan Bs. We’re in a plan A. Everyone has to assume his responsibilities.”

Moscovici negated that such ease in austerity would mean to lose focus on targets to reduce its public deficit, policies aimed at promoting job creation and growth are thought to become more aggressive within its planned reforms.

Hollande and German Chancellor Merkel, both spoke on the phone last Saturday, to discuss pro growth vs austerity subjects.

Moscovici repeated that France would stick to its target to cut its public deficit to below 3 percent of economic output in 2014, but he welcomed the two-year leeway in case growth is not strong enough.

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