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Austerity must not hurt growth: Slovakia echoes France

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(Globalpost/GlobalPost)

Slovakia's Prime Minister Robert Fico echoed on Tuesday a line taken by France, insisting that austerity measures must not undermine economic growth within the debt-burdened European Union.

The leaders from the 27-member EU bloc meet in Brussels on Thursday and Friday for a summit seen as struggling to produce agreement on the EU's trillion-euro 2014-20 budget as states spar over proposed spending cuts.

Italy and Germany appeared to be on a collision course over cuts demanded by Britain, with France raising the spectre of a breakdown in negotiations.

British Prime Minister David Cameron is seeking to bring the budget down to 886 billion euros.

Fico, who like French President Francois Hollande, is on the political left, insisted that the EU should ease strict austerity plans in order to promote growth.

"It's no secret that (fiscal) consolidation which is too rapid hurts economic growth," he told journalists in Bratislava.

"If new rules were to be set, such as slower fiscal consolidation, they must apply to all EU member states not just big players," said Fico, leader of 5.4-million-strong Slovakia, a eurozone member dependent on its auto and electronics exports to the EU, mainly Germany.

"We are talking year 2014 and later," he said, adding that his government would keep its promise to cut the public finance deficit from 4.6 percent of GDP in 2012 under 3.0 percent this year.

Earlier on Tuesday, Hollande warned that cuts to the upcoming EU budget were necessary, but must not be allowed to undermine fragile growth.

A bad-tempered November summit failed when several member states, led by Britain, called for sharp budget cuts at a time when all governments were having to reduce spending so as to balance the public finances.

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http://www.globalpost.com/dispatch/news/afp/130205/austerity-must-not-hurt-growth-slovakia-echoes-france