France calls for more time for Greece to meet deficit targets

City A.M. Reporter
GREECE should be allowed more time to meet deficit targets set by international lenders provided it is sincere about reforming its economy, French Prime Minister Jean-Marc Ayrault said yesterday.

Near-bankrupt Greece needs the European Union and International Monetary Fund’s blessing on spending cuts worth nearly €12bn (£9bn) to unlock its next tranche of aid, without which it faces default and a potential exit from the Eurozone.

“The answer must not be a Greek exit from the Eurozone,” Ayrault said in an interview with news website Mediapart. “We can already offer it more time...on the condition that Greece is sincere in its commitment to reform, especially fiscal reform.”

Tough fiscal medicine prescribed by Greece’s international lenders has provoked widespread popular anger there that forms part of a broader backlash – spearheaded by French President Francois Hollande – against German-led austerity measures across Europe.

So far, Greek officials have said agreement on €9.5bn of the €11.5bn package of spending cuts had been reached. That includes €6.5bn in cuts to wages, pensions and benefit payments and a further €1.1bn euros in savings planned from an increase in the retirement age.

Responding to doubts over Hollande’s ability to deliver on his pro-growth, anti-austerity platform, Ayrault told Mediapart that a planned €120bn European Union stimulus package for the bloc as a whole was one of his successes – but that this should only be a first step.

“We need to go further ...€120bn is not enough,” he said.