President Francois Hollande said last night that "the European Commission will not dictate" to France what "it should do" - Brussels asked Paris to start implementing the reform of the pension system this year.
"When it comes to structural reforms, including the reform of the pension system, it is ours and only ours to say how we can achieve the goal in the right way," the French president pointed out in an unusually sharp tone. On Wednesday, the European Commission asked France to implement reforms not only of the pension system but also of the labor market, in exchange for a two-year postponement of the deadline for reducing the budget deficit to below three percent.
François Hollande said that he "already has a proposal" to reform the pension system. "The truth about pensions is that the conversation is starting with all partners with the aim of ending the deficit fairly, responsibly and decisively," he said. Talks should start in June, and the government would consider the reform at the end of this year.
Record unemployment and a decline in economic growth
Hollande reiterated that his government's goal is "to reverse the unemployment curve" by the end of this year, while the Organization for Economic Co-operation and Development (OECD) predicts a further increase in unemployment in France, both this year and next, even forecasting its growth to over 11 percent. .
France, as the second most economically strong country in the Eurozone, is currently facing record unemployment, declining economic growth and budget problems. This was also the reason why the European Commission proposed to France a two-year extension of the deadline in which it must reduce its deficit to below three percent of gross domestic product (GDP). The President of the European Commission himself, José Manuel Barroso, stated that the Commission has a rather demanding attitude towards France.
Slovenia for two years, and Italy under a watchful eye
The European Commission, in addition to France, has also given Slovenia and Spain a deadline of two years to put their deficits in order. It gave Belgium, the Netherlands and Portugal only one year to settle the deficit in the budget so that it does not exceed three percent. All these countries were told to use this time to implement structural reforms.
On the other hand, the Commission exempted some countries, such as Italy, from the process of exceeding the allowed budget deficit limit. Italy, however, remains under the watchful eye of the EC, primarily because its debt amounts to 130 percent of the total gross domestic product, and only 60 percent is allowed. Countries with good forecasts, such as Germany, also received recommendations. Thus, Germany would benefit from an increase in wages, a reduction in taxes and social benefits in order to increase demand in the internal market.
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