PARIS/BERLIN (Own report) – Paris has strongly reacted to Germany’s new attempts to impose its austerity dictate on the French national budget. Following the German government’s massive interventions in Brussels, German EU Commissioner Günther Oettinger called the French government a “recidivist” in a newspaper column last Friday – because it does not accept the full extent of Germany’s austerity dictates. This is an “uncontrolled gaffe,” said the General Secretary of the ruling French Socialist Party (PS) and called on Oettinger to resign. To impose more massive budget cuts, Berlin continues its efforts to torpedo the budget compromise reached by the French government with the EU Commission in late October. Since months, observers have been warning against a deflationary spiral and strong social protests in France. The EU Commission’s position statement on France’s budget, scheduled for today, may have to be postponed because of German interventions.
German Austerity Dictates
Berlin’s incessant demands that Paris submit to its austerity dictates have caused the current conflict. During conservative President Sarkozy’s incumbency, the German government successfully imposed – against massive French objections  – its austerity policy as the EU’s standard. Following its first major success earlier this year, when President François Hollande announced budget cuts of 50 billion Euros by 2017 and 30 billion corporate tax cuts, Berlin now seeks to force Paris to apply even more austerity programs. However, massive resistance persists in France against this neoliberal imposition.
Pressure on Brussels
In late October, Paris and the EU Commission reached a compromise in their dispute over the implementation of the austerity dictates: The French government reduces its structural budget deficit and Brussels in turn permits France to lower its national debt under the official three-percent-limit only by 2017. France was hoping that with this delay it would have better chances to stimulate its economy. Berlin seeks to sabotage this compromise. After massive German pressure on Brussels, when, in a letter to EU Commissioner for Economic Affairs Pierre Moscovici on October 20, German Finance Minister Wolfgang Schäuble and Minister for the Economy Sigmar Gabriel demanded stricter budgetary controls, the German EU Commissioner Günther Oettinger has now placed an article in the French business paper “Les Echos,” which was published last Friday, provoking strong protest in Paris.
Last weekend, Paris reacted strongly to Oettinger’s newspaper column, which had been published with the knowledge of EU Commission President Jean-Claude Juncker. According to the press, ECB President Mario Draghi had at least been informed beforehand, of the contents and the article was supported by Eurogroup President Jeroen Dijsselbloem. Oettinger’s “uncontrolled gaffe” oversteps his preogatives as EU Commissioner, declared PS General Secretary, Jean-Christophe Campadélis and demanded consequences. “Resignation” would be appropriate. The power struggle continues. An EU Commission statement on France’s national budget, originally scheduled for today, Monday, may have to be postponed a few days – because Berlin, as Oettinger’s gaffe has made clear – would like to see far more drastic cuts in Paris’ budget.