French Finance Chief Bruno Le Maire said that in early March he would make proposals to German Economy Minister Robert Habeck to reduce the norms of the European Union, which, in his opinion, are a factor of negative impact on business and create obstacles to economic growth.
On Monday, February 19, in Paris, during a conversation with journalists, Bruno Le Maire, in a symbolic manner describing the state of the economic system and its prospects, said that the current processes are comparable to participating in a 100-meter race with a ball and a chain around an ankle. In his opinion, the growth of the European economy is constrained by norms, rules, regulations, and directives. Also in this context, Bruno Le Maire drew attention to the problem of excessive administration. According to him, negative factors deter European companies and at the same time not a barrier to business in China and the United States.
Currently, the EU’s economic system is in a state that borders on stagnation. Against the background of difficult realities, the French government has lowered the country’s GDP growth forecast for 2024. Spending cuts of €10 billion ($10.8 billion) were also announced. The relevant decision was made as part of Paris’ desire to fulfill its obligations to reduce the country’s budget deficit.
Robert Habeck last week announced his intention to revise the forecast for the dynamic German economic system downwards.
Bruno Le Maire noted that the EU’s problems in the sphere of the economy are partly the fault of Brussels, which has established a system of rules that have become a factor constraining growth. He and Robert Habeck intend to detail their proposals for improving the situation at a meeting of the Franco-German Cabinet, which is scheduled for March 5.
Bruno Le Maire said that progress in deepening European capital markets is also a solution that can stimulate the growth of the European economy. EU finance ministers are due to discuss the issue at a meeting in Ghent, Belgium, this week.
The Bundesbank’s monthly report on the state of Germany’s economic system, published on Monday, notes that the country is probably already facing a recession. The financial regulator stated that the current realities are weak external demand, caution in the consumer environment, and high borrowing costs, constraining domestic investment.
Currently, Berlin is in the zone of action of such a problem as the high cost of energy resources. Industry has a huge share in the economic system of this country. The German economy has shown negative or zero dynamics for the fourth quarter in a row. Berlin’s results are a factor influencing the entire EU. In this case, the situation in Germany creates a kind of source of pressure on the pan-European economy.
The Bundesbank report states that the German economic system is still not on a recovery trajectory. The central bank warns that German output will show a slight decline in the first quarter of 2024. Another negative dynamic of the mentioned indicator will be a reason to state a technical recession.
Against the background of the negative state of affairs in Germany, questions have arisen about the sustainability of the country’s economic model. Some experts point out that most of the German heavy industry, which depends on energy resources, is currently being squeezed out of international markets.
As we have reported earlier, Bank of France Head Says Tough Regulations Make EU Lenders Robust.
