French Minister: Won't Lend To Greece If Efforts Insufficient
French budget minister and government spokeswoman Valerie Pecresse Sunday said France would stop lending to Greece if it does not deliver on its part of the bailout program.
"The plan has two aspects; aid to Greece with the guarantees, but also a Greek recovery plan. They have a privatization program, a spending-cut program, a program for taxing revenues. Greece must make efforts, otherwise we won't lend to them," she said in an interview broadcast Sunday on French television channel M6.
Earlier this month, talks between Greece and a visiting troika of officials from the European Commission, International Monetary Fund and European Central Bank--who were in Athens to assess the country's eligibility for fresh aid---were suspended in a spat over whether Greece would need to take further measures. Greek Prime Minister George Papandreou vowed Saturday that the country would meet its budget targets and press ahead with difficult reforms, even as thousands demonstrated against those reforms on the streets of Greece's second-largest city.
Pecresse also said France will not bring its deficit-reduction targets forward because that could damage growth and the job market. The French government has committed to cutting its deficit from an expected 5.7% this year to 4.6% in 2012 before reaching the 3% stipulated in European treaties in 2013.
"We could carry out an enormous austerity plan today, cutting pensions and salaries of civil servants, and we would get back to 3% straight away. But that would break growth and increase unemployment," Pecresse said.
Pecresse conceded there is a "crisis of confidence" in markets, which are traversing a turbulent period. "But there is an irrational character to all the concerns being voiced at the moment because the French economy is solid, we have kept to our deficit-reduction commitments," she said.
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