Tue, 03 Oct 2023

PARIS, France - French Economy Minister Arnaud Montebourg, addressing a socialists' meeting in eastern France Sunday, said that the country needs to resist Germany's "obsession" with austerity and promote alternative policies across the euro zone that support household consumption.

Montebourg told supporters deficit-reduction measures carried out since the 2008 financial crisis have crippled Europe's economies, he said that European governments need to change course swiftly or risk losing their voters to extremist and populist parties.

"France is the euro zone's second-biggest economy, the world's fifth-greatest power, and it does not intend to align itself, ladies and gentlemen, with the excessive obsessions of Germany's conservatives," Montebourg told the crowd.

Montebourg added that he had asked French President Francois Hollande for a major re-direction of economic policy that would put growth before austerity, saying that the government should focus less on cutting debt than on supporting households to revive consumption.

The French economy minister's comments are likely to embarrass President Hollande who said just days ago that he would not back away from his policy based on spending cuts and corporate tax breaks, despite mounting public pressure.

The president's business-minded policies have angered many left-wing politicians and voters are frustrated with his failed pledge to curb unemployment. He is now the most unpopular president in more than 50 years, with an approval rating of 17% according to some polls.

Montebourg, who makes no secret of his own presidential ambitions, is known for his frequent attacks on austerity, and while Hollande's office declined to comment on his statement, a source close to Prime Minister Manuel Valls told Reuters Montebourg had gone too far.

"Firstly, there are declarations on economic policy and secondly, statements on our European partner Germany that are extremely harsh. Therefore, considering the line has been crossed, the prime minister has decided to act," the source said, but gave no further details.

Six years after the collapse of banking group Lehman Brothers and the start of the 2008 global economic crisis, the United States and Britain are once more experiencing economic growth, while euro zone economies continue to retract or stagnate, leading to a myriad of arguments among EU politicians as the cause of Europe's ongoing economic malaise.

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