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Hollande urges `flexibilities` in applying EU budget rules

French President Francois Hollande called Tuesday for "flexibilities" in applying EU budget rules, as Italy`s prime minister said on the same day that a shake-up was needed in Europe`s approach to growth.



Paris: French President Francois Hollande called Tuesday for "flexibilities" in applying EU budget rules, as Italy`s prime minister said on the same day that a shake-up was needed in Europe`s approach to growth.

"France proposes that budgetary rules be applied in a manner favourable to investment and employment," Hollande wrote in a letter to European Council President Herman Van Rompuy, in extracts published in daily Le Monde.

"It is about taking full advantage of flexibilities to take into account reforms undertaken by countries and their economic situations," he wrote.

Hollande and Renzi have been pushing for a rethink of the EU`s strict budget policies and German-backed austerity efforts ahead of a key summit that starts in Brussels on Thursday.

France and Italy have denied seeking to change the rule that budget deficits should not exceed three percent of annual gross domestic product, but have repeatedly called for more leeway in how it is applied.

In the letter to Van Rompuy, Hollande said the foundations had been laid for an economic rebound in Europe but a "deeper discussion" was needed on budgets.

"The goal is to guarantee a balanced budget policy for the eurozone," Hollande said.

He said the impact of national decisions on the whole EU also needed more study, raising concerns about "weak inflation".

Hollande also called for increased coordination of social policies across the 28-member bloc, for example with a Europe-wide minimum wage and minimum levels of corporate taxes.

Italy`s Matteo Renzi meanwhile told the Italian parliament on Tuesday that rigidity on rules was hampering efforts to kickstart European economies.

He warned the "high priests and prophets of austerity" that "there can be no stability possible if there is no growth."

From Zee News

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