10 June 2004, 12:14  ECB's Noyer urges France to respect stability pact

France must respect pledges to get its public deficit below three percent of GDP -- the cap set by the EU Stability and Growth Pact -- in 2005, European Central Bank governing council member Christian Noyer said on Thursday. Noyer, who is governor of the Bank of France, also said it was vital that rises in tobacco levies, healthcare and social benefit do not lead to entrenched inflation. He was presenting an annual report and letter on monetary policy, which said: "The stability and growth pact constitutes a particularly important element in the overall cohesion of the euro area through the imposition of the same fiscal discipline on all participating countries," he said. "One should not labour under the illusion that government deficits foster sustainable growth," he said, reading from the letter that goes to the French political authorities.
Many believe Paris will have a hard time meeting a pledge to bring its deficit -- which it expects will stay above the three percent mark for a third year running this year -- back under the EU limit. In an apparent defence of the two percent inflation control target of the ECB, which was criticised by French Finance Minister Nicolas Sarkozy on Wednesday, Noyer noted that the same target was also used in Canada, another country which is part of the Group of Seven leading industrialised economies. He said there was already intense dialogue under way between the ECB and the Eurogroup, an informal forum where ministers from the 12 euro zone countries meet.///

© 1999-2024 Forex EuroClub
All rights reserved