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Pierre Moscovici, Finance Minister Under Fire

April 30, 2013 by Leave a Comment

“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

Filed Under: Global Business Tagged With: , ,

The Saturday Profile: For Wolfgang Schäuble, Seeing Opportunity in Europe’s Crisis

November 20, 2011 by Leave a Comment

WHERE the world finds only chaos and impending disaster in the European debt crisis, Wolfgang Schäuble sees the long-awaited urgency to finish the half-complete job of unifying Europe. As Germany’s finance minister and a close confidant of Chancellor Angela Merkel, he is in a uniquely powerful position to shape the outcome.

Yet it is something of a miracle that Mr. Schäuble is in the German government at all. His health has been an issue since Oct. 12, 1990, the day a would-be assassin shot him, paralyzing his legs and confining him to a wheelchair from that point forward.

His troubles did not end there, however. As recently as May 2010, on his way to Brussels for an emergency meeting of European Union finance ministers, Mr. Schäuble (pronounced SHOY-bluh) found himself in the intensive care unit of a Belgian hospital, battling complications from an earlier operation.

At that point, with the German news media speculating about his resignation, and even his chances of survival, he phoned Mrs. Merkel to discuss his future.

AS the early sunset of a Berlin autumn evening darkened his office, Mr. Schäuble, 69, recalled asking Mrs. Merkel if he could have until the end of the week to see whether he could regain enough strength to return to work. “She said she found that to be the wrong question entirely. I should take the time I needed to get better,” Mr. Schäuble said. “She said she needed me and she wanted me. End of discussion.”

It proved to be a wise decision. Mr. Schäuble’s experience has been crucial to Mrs. Merkel as she has tried to hold the line between European partners demanding Germany’s financial assistance and angry voters who do not want to pay off the debts of their profligate southern neighbors. And political analysts say Mr. Schäuble was indispensable in holding together the conservative bloc in the vote over expanding the European rescue fund, the bailout fund meant to help heavily indebted euro-zone nations like Greece, which had evolved into a de facto vote of confidence for Mrs. Merkel’s crisis management.

Mr. Schäuble recalled the palpable fear at a meeting of the Group of 20 finance ministers in Washington in September, held the week before the vote on the rescue fund was scheduled. “You should have felt it,” he said he told his party’s parliamentary group upon his return. “We carry not only responsibility for ourselves. We are also responsible for the development of the global economy.”

Mr. Schäuble, his hair white and a little sparse, the hint of gravel in his voice, is the oldest member of Mrs. Merkel’s cabinet, the last born before the end of World War II and a throwback to pro-European conservatives like Helmut Kohl, under whom he was chief of staff. A campaign finance scandal forced him to step aside in 2000 as chairman of the Christian Democratic Union in favor of the young East German politician Angela Merkel, whom he had put forward as the party’s general secretary less than two years earlier.

NOW, for the second time in his career, Mr. Schäuble finds himself loyally serving a chancellor. He was a whiz at math as a boy but studied law, eventually earning a doctorate. He was just 30 when he entered the Bundestag, with an eye fixed on the chancellery.

But over the years, with the shooting, the scandal and Mr. Kohl’s lengthy tenure — some say his refusal to give way to his presumed successor — Mr. Schäuble evolved from an ambitious young politician to an elder statesman beyond worrying about his political future. “If it puts him in a bad light, but it’s good for Germany, he’ll do it,” said Fred B. Irwin, president of the American Chamber of Commerce in Germany, who has known Mr. Schäuble for 25 years.

That, observers say, has given him the freedom to pursue an agenda even more pro-Europe than Mrs. Merkel’s. “Under Merkel he’s developed an extremely independent role,” said Ulrich Deupmann, author of a biography of Mr. Schäuble. Or as the Frankfurter Allgemeine newspaper put it this year: “The finance minister is his own chancellor.”

Article source: http://feeds.nytimes.com/click.phdo?i=bc17c6b10fd5ceffdc8c31305c5f9181

Filed Under: Economy News Tagged With: , ,

Greek Leaders Reach Deal to Form a New Government

November 7, 2011 by Leave a Comment

The agreement on Sunday appeared to break a political deadlock that had paralyzed Greece in the face of an acute financial crisis that threatened to infect other euro-zone nations, especially Italy. European leaders see the debt-relief deal struck with Greece on Oct. 26 as crucial to containing the crisis in Greece and insulating Italy, a much larger economy whose political leaders have also struggled to cut budgets and deal with heavy debt.

Yields on Italian bonds — the price Italy must pay to borrow money on international markets — rose on Monday to over 6.6 percent, the highest since the introduction of the euro more than a decade ago, news reports said.

But in a statement reported by the ANSA news agency, Mr. Berlusconi said talk of his resignation before a crucial parliamentary vote on Tuesday was “without foundation.”

The agreement in Greece could not have come soon enough for its European partners, who have pressed the country hard to forge a broader political consensus behind the debt deal. But it was not clear whether the agreement would provide the certainty that skeptical investors are demanding to calm turbulent financial markets.

The debt deal requires that the Greek Parliament pass a new round of deeply unpopular austerity measures, including layoffs of government workers, in a climate of growing social unrest. It also calls for permanent foreign monitoring in Greece to ensure that it makes good on its pledges of structural changes to revitalize its economy, a requirement that many Greeks see as an affront to national sovereignty.

With a narrow and eroding majority in Parliament, Mr. Papandreou’s Socialist government found that it could not unify to push through such measures on its own, but Antonis Samaras, the leader of the conservative New Democracy party, opposed many of the debt deal’s provisions and demanded Mr. Papandreou’s resignation and a snap election. After days of frantic political wrangling, Mr. Papandreou survived a confidence vote in Parliament on Friday, setting the stage for Sunday’s compromise.

The new unity government, in which the major parties would share power, is widely expected to be led by a nonpolitician and to govern for several months, long enough to carry out the debt deal and pass a budget for 2011. The name of the new prime minister and the composition of the new cabinet were not expected to be announced until Monday, when the leaders will meet again, according to a statement Sunday night by the Greek president, Karolos Papoulias, who moderated the talks on Sunday.

In a statement early Monday morning, the Greek Finance Ministry said that delegations from the Socialist Party and New Democracy met on Sunday “to discuss the time frame of the actions” to implement the debt deal, and added that the two parties regarded Feb. 19 as “the most appropriate date for elections.”

In reaching the agreement, Mr. Papandreou agreed to meet Mr. Samaras’s demand that he step down as prime minister, while Mr. Samaras agreed to back the debt deal and a seven-point plan of priorities proposed by Mr. Papandreou that would essentially commit the new government to the terms of the debt deal.

Mr. Samaras is not expected to play a role in the unity government, but would be New Democracy’s candidate for prime minister in the general election.

In many ways, a new interim government for Greece buys time for European leaders to put together a stronger bailout mechanism that would protect larger economies from the risk of default, chief among them Italy. High debt, low growth and Mr. Berlusconi’s diminishing credibility have made that nation increasingly vulnerable.

“The decision is very positive, because it will appease the markets and because it shows that Greek authorities are doing what foreign leaders want them to do — to get on with implementing the conditions for the E.U. debt deal,” said Athanassios Papandropoulos, an economist and commentator for the conservative Greek newspaper Estia.

Landon Thomas Jr. contributed reporting.

Article source: http://feeds.nytimes.com/click.phdo?i=b3f9d4ecb7d12beda625c512357188ed

Filed Under: Business News Tagged With: , ,