posted at 22:50
Author Name: Mathilde Richter
Franco-German mini-summit to tackle growth, budget
On the eve of the visit, Sapin and Macron called on Germany to increase investment by 50 billion euros in the next three years to match the amount Paris is seeking to save from public spending. France, grappling with sky-high unemployment and a ballooning budget deficit, has been spearheading a campaign for Germany to soften its stance on fiscal austerity and loosen its purse strings to provide much-needed stimulus. French President Francois Hollande's government has refused to approve further spending cuts needed to meet the EU's budget deficit target before 2017, arguing that more austerity would only further slow a stagnating economy. Germany is adamant that all member states stick to the EU's budget rules and press ahead with much-needed structural reforms. A report by Spiegel news weekly said Germany was helping France to draw up a pact with the European Commission on deficit reduction and structural reforms to win Brussels' approval of its 2015 budget. On Sunday, Macron said he was "Absolutely sure" that Brussels would not veto the French budget, which is expected to post a 4.3-percent deficit in 2015 - overshooting the 3.0-percent ceiling set by the EU. The deficit - the shortfall between revenue and spending - is not expected to drop to that level until 2017. The EU's executive branch has around two weeks to decide whether countries' budget submissions break the rules. The Commission has new powers to enforce the deficit limit, and could for the first time send the budget back to Paris for changes.

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