French minister says compromise can be reached with Greece

PanARMENIAN.Net - French Finance Minister Michel Sapin said on Monday, Feb 9, that a compromise can be reached between Greece and its European partners over a fiscal and economic plan that recognizes the will of the country’s voters while respecting the region’s budget rules, the Wall Street Journal reports.

Speaking to reporters during meetings of top finance and central bank officials from the Group of 20 largest economies, Sapin also said that Europe is in far better shape to withstand any contagion from Greece’s volatile economic and political situation, saying “it’s another world compared to 2012” when Greece’s debt crisis reached a fever pitch.

Sapin said that in the past week he has seen evidence that Greek officials understand the reality of their debt burden, which should form the basis for constructive talks with other European governments.

“I think there’s flexibility to find a short-term solution” that would give Greece financing while a longer-term program for the country is hashed out, Sapin said. “The words will be important” in how a short-term financing plan is described, he noted, referring to whether it would be considered bridge financing or an extension of the current bailout program.

Turning to monetary policy in the eurozone, Sapin said that policies by the European Central Bank are important but that monetary policy “can’t do everything.”

Last month, the ECB announced that it would buy €60 billion a month in public and private bonds, mostly government debt, starting in March and running until the fall of 2016, or until the bank’s 2% inflation target is met. The euro weakened considerably in the run up to the ECB’s decision and its aftermath, a boost to French and other European exporters, although Sapin largely sidestepped questions about exchange rates.

Sapin said Europe’s economy needs reoriented fiscal policies that take into account the need for faster economic growth, while still respecting the region’s budget rules.

And he stressed that France will find the right recipe for economic growth despite it largely stagnating in recent years. “France is not the sick man” of Europe, he said.