WASHINGTON: Widening differences over economic policy among euro area countries are "unsustainable" and could undermine the currency union itself, French Finance Minister Bruno Le Maire said Friday (Apr 12).
"There isn't enough solidarity in the eurozone," Le Maire told reporters on the sidelines of the International Monetary Fund and World Bank Spring meetings.
"Growing economic divisions among member states are unsustainable in the long term and could result in the disappearance of the common currency project."
"Countries with solid budgets must invest more," Le Maire said.
That was the same message pushed by the IMF itself, which on Friday again urged Germany in particular to boost spending in order to accelerate growth a raise wages, and reduce its budget and trade surpluses.
Le Maire said "Those with the means shouldn't hoard money for years and years, allowing growth to deteriorate."
Instead, those governments should "invest in new projects, innovation, so that there can be more cooperation and solidarity in the eurozone."
Le Maire also said the global economic slowdown was "pronounced and worrisome," calling on countries to be prepared for a "collective response."
The European response could come in the form of the "growth pact" he proposed Friday which would include increased spending by economies with the "fiscal space" to do so, an allusion to Germany and the Netherlands.
Meanwhile, states like France should pursue economic reforms and shore up their finances, something Paris is "determined" to do with measures "that get results," he said.
The country is "clear-eyed about France's economic weaknesses," he said, adding, "I hope that every euro area member will have the same wisdom and clarity. If not, there can be no common future."