Germany and France have drafted a joint proposal to give countries using the euro more flexibility in running up budget deficits, German Chancellor Gerhard Schroeder said Monday. Schroeder and French President Jacques Chirac said they were confident that Luxembourg, which currently heads the European Union, would succeed in brokering a compromise within the EU. "The idea is to put more emphasis on the growth orientation," Schroeder told a news conference after talks with Chirac.
"We want to make the whole thing a bit more flexible," Chirac said, adding that the pact had been "interpreted too strictly" in the past. Germany and France have broken the deficit limits of the so-called Stability Pact in each of the last three years.
Neither leader gave details. Schroeder said he would present the joint proposal to Luxembourg Prime Minister Jean-Claude Juncker, whose country chairs the European Union in the first of half of 2005. Slow economic growth in Germany and France has made them chafe for some time at the stability pact, designed to limit euro countries' budget deficits to 3 percent of gross domestic product to help keep the currency stable.
Schroeder also reaffirmed that Germany and France oppose EU draft rules on the free movement of services, which have raised concerns of an influx of cheap labor, especially from new members in eastern Europe that joined last year.
He called for a complete redrafting of the plan by the EU's executive Commission. "We will make that clear in talks with the Commission," Schroeder said, adding that his people's fears in western Europe needed to be taken seriously. |
