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France, Germany lock horns over $63.8 billion stimulus plan

France, Germany lock horns over $63.8 billion stimulus plan

BERLIN: France and Germany locked horns over a crucial 3-year stimulus programme of $63.8 billion, widening the rift in the eurozone.

The call from French Finance Minister Michel Sapin and Economics Minister Emmanuel Macron came the same day they were scheduled to meet their German counterpart in Berlin.

The proposal arrived as a counterpoint to Berlin’s continued emphasis on spending cuts despite mounting evidence that European economies, including Germany’s, may be headed for recession. It underscored the European discord over austerity versus stimulus as Paris and Brussels engage in a standoff over France’s proposed budget for next year, which comes with a deficit that exceeds European Union limits.

Macron urged Germany to avoid excessive austerity in an interview with Frankfurter Allgemeine Zeitung, a German newspaper. He said that while France has been floating the idea of cutting its government spending by €50 billion over three years, better-off Germany should counterbalance that by injecting more money into Europe’s sputtering economy.

“Fifty billion euro savings for us and 50 billion additional investment for you-that would be a good balance,” Macron was quoted as saying.

But Chancellor Angela Merkel’s government has shown no sign of budging on its domestically popular promise to balance Germany’s federal budget in 2015 for the first time since 1969.