The governor is concerned that the target of reducing the public deficit to 3% of gross domestic product has again been postponed, this time to 2017, explaining that “can not accumulate indefinitely deficits” .
GROWTH BELOW 1%
While the government has fixed Wednesday its growth forecast for 2014 to 0.4% and 1% for 2015, according to Mr Noyer, the potential for growth of the French economy “is probably less than 1 % ‘. “It means that there is no” plan B “in the accumulation and increasing deficits. It is not enough to increase spending. It would not work, because
Governor Bank of France said that in order to reduce the deficit it should not raise taxes, but cut down spending. While Brussels on Wednesday asked the France “credible action” to its plan to reduce spending by 2015, Christian Noyer argued that the country was “accounting of holding” of commitments vis-à-vis its European partners. “When you deviate commitments on which it is worn, you risk losing credibility. So it must be demonstrated that follows a path of economic reforms and reduce spending that is credible “.
Christian Noyer cited the example of several European countries that have achieved to recover.
“When you look at countries that have made reforms, watch Spain, Portugal look, look at Ireland, which have gone through very difficult times, who is very strong reforms in the labor market, the market for goods and services. Now these countries have returned to growth, so there’s a dividend of good reform. “
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