By Annika Breidthardt
BERLIN (Reuters) - France's new Socialist government sought on Monday to reassure Germany, its closest partner and the European Union's pivotal power, that it would stick to promised deficit reductions and step up economic reforms to accelerate sluggish growth.
Finance Minister Michel Sapin told his German counterpart, Wolfgang Schaeuble, that any measures to cut France's budget gap would come from savings and growth, promising to take "tough, brave" decisions to overhaul a rigid economy.
"We all know the way out of the crisis will be first of all for us to stick to our commitments and secondly through higher economic growth," Sapin told a joint news conference.
He made a joint maiden visit to Berlin with Economy Minister Arnaud Montebourg, an outspoken critic of what he calls German-imposed austerity. Montebourg met separately with German Economy Minister Sigmar Gabriel but did not speak to reporters.
Sapin made no mention of his call last week for more time to bring the deficit, which stood at 4.3 percent of national output last year, to below the EU treaty limit of 3 percent. Paris has already been granted a two-year delay by EU authorities until the end of 2015 to meet that target.
Schaeuble said France had confirmed that it knew its obligations and he voiced confidence in cooperation with Sapin.
When pressed on the pace of deficit reduction, Sapin declined to comment, saying France's new Prime Minister Manuel Valls would set out the government's policy in a keynote speech to parliament on Tuesday.
Sapin also said he would meet EU Economic and Monetary Affairs Commissioner Olli Rehn at the annual International Monetary Fund spring meeting in Washington next weekend to discuss the issue.
"I believe this dialogue will lead to overcoming any difficulties there may be," Sapin said.
France is due to present a new medium-term budget plan to the European Commission in mid-April after being told last month
it was off course. The EU executive will issue its country-specific policy recommendations in June after EU elections.
AUSTERITY VS GROWTH
The balance between fiscal austerity and stimulating economic growth and consumption is turning into a central issue in the campaign for European Parliament elections next month.
Martin Schulz, the European Socialists' leading candidate for the post of European Commission president, cautiously endorsed France's plea for more time last week.
"If it is necessary, then yes, but first it has to be negotiated," he told France's BFM TV.
His conservative rival for the top job, Jean-Claude Juncker, hit back at the weekend, telling reporters: "It is a serious political error that Martin Schulz wants for the third consecutive year to allow France to exceed the 3 percent deficit limit. This goes against the Stability and Growth pact (EU budget rules), which I wrote as president of the Eurogroup."
French President Francois Hollande, under pressure from angry voters and left-wing lawmakers to ease up on savings measures, indicated after a local election drubbing last week that Paris would seek another delay from its European partners.
Nearly 100 back-bench Socialist lawmakers - almost one in three - signed an open letter to Valls at the weekend demanding a change in economic policy to improve workers' living standards and boost consumption.
Sapin said the government would carry out deep reforms to improve companies' profit margins and enable them to invest and create more jobs to bring down France's nearly 11 percent unemployment - more than double Germany's jobless rate.
Hollande has promised 50 billion euros ($68.47 billion) in budget savings over the next three years and an additional 10 billion euros in cuts in employers' labour charges in what he calls a "Responsibility Pact" in return for job creation.
Valls is expected to give more detail on Tuesday about how those spending cuts will be achieved, including an expected two-year extension of a freeze on most civil service pay.
Schaeuble expressed support for the French approach, telling reporters: "Germany needs a strong France and we already said after President Hollande announced the Responsibility Pact that we believe it's quite a good path and that we are confident France will continue to be successful and strong."
Paris has a long history of non-compliance with its EU deficit-cutting commitments. In 2003, France and Germany jointly led a move to suspend the Stability Pact to avoid sanctions over their excessive deficits, setting a precedent for others.
One of the first moves Hollande's conservative predecessor, Nicolas Sarkozy, made was to address the Eurogroup of euro zone finance ministers to demand two more years to reduce France's deficit to give him time to carry out structural reforms.
The 2008 financial crisis blew out the French and other euro zone countries' deficits. While Germany's budget is now back in balance, France remains far from the target despite raising the tax burden to a peacetime record level.
(Additional reporting by Leigh Thomas in Paris; Writing by Paul Taylor; Editing by Gareth Jones)