Pierre Moscovici, Finance Minister Under Fire

“France has too much debt,” Mr. Moscovici said bluntly in an interview. “We must reduce deficits to keep our sovereignty and our credibility.”

He is attacked from the right for not being firm enough in cutting public spending and for not digging hard enough to uncover the tax fraud of the disgraced former budget minister, Jérôme Cahuzac. He is attacked from the left for being too moderate, too pragmatic and too willing to cut public spending in a period of stagnation. In other words, for being insufficiently socialist.

Mr. Moscovici, 55, rejects both sets of criticism, but as the man in charge of the economy he is clearly an easy target for political sniping and ideological anger. Asked why the French are so angry and depressed, he said: “As I sometimes say, I’m not a psychoanalyst; my mother is.”

The president he serves, François Hollande, is the first Socialist president in 18 years, elected in May on promises of economic growth and job creation. But Mr. Hollande is already the most unpopular president in the Fifth Republic, and a main reason is the parlous state of the economy that Mr. Moscovici oversees.

Growth is almost nil, and unemployment is at record levels, with the number of people looking for work higher now than at any time in France’s postwar history; youth unemployment is at 24.4 percent, with 80 percent of new jobs actually temporary contracts.

At the same time, France is committed to budget deficit targets as a member of the euro zone, and even if the targets are stretched, Mr. Hollande and Mr. Moscovici know they may have to make significant cuts in spending to remain credible with European partners and the markets. In the ambiguous land between “no austerity” and spending cuts, there is much room for metaphor and euphemism.

Even as France is asking Brussels and main partner Germany for more time and space to meet its commitments, Mr. Moscovici likes to talk of a “serious budget” and “structural reforms.” He speaks of the political risks of austerity and the need for politicians to gauge the tolerance of their voters, their political allies — and, in France’s case, its small but powerful unions.

The argument against austerity, pressed by Mr. Hollande with the support of the troubled southern rim of the euro zone, is gaining ground, especially as Germany faces an election and Chancellor Angela Merkel’s conservatives face a renewed challenge from the Social Democratic Party. Even Wolfgang Schäuble, the German finance minister and one of austerity’s leading champions, speaks with understanding of the French dilemma.

“Of course, France must continue on the path of structural reforms,” he said on Thursday. “You cannot make changes overnight — that must happen step by step, then it will be credible. Then you can indeed be flexible on the question of in what year you have a deficit.”

Of course the centrality of France to the euro zone means that it will always get more leeway than a smaller country — especially given its overall strengths in demography, infrastructure and innovation. As Mr. Moscovici is fond of pointing out, France is the world’s fifth-largest economy and ranks fourth in attracting foreign investment. While it has problems with labor costs and declining competitiveness, “we are not the sick man of Europe,” he said angrily, accusing much of the Anglo-Saxon and German press of “French-bashing.”

Mr. Moscovici also can get annoyed when discussing the “neoliberalism” and “orthodoxy” of the technocrats of the European Commission, which sets the rules. At one point, when discussing the demands of Eurocrats to keep the annual budget deficit at or below 3 percent of gross domestic product, Mr. Moscovici burst out and said: “There is a mainstream view in the European Commission that is neoliberal, or orthodox. But I’m a socialist, a social democrat!” In France, he said, “we have elections, we have political choices, and we are defending our own way.”

Article source: http://www.nytimes.com/2013/04/30/world/europe/pierre-moscovici-finance-minister-under-fire.html?partner=rss&emc=rss