French finance minister says no EU fiscal pact without growth

French Economy, Finance and Foreign Trade Minister Pierre Moscovici takes a seat in his office following a handover ceremony.

Story highlights

  • Hollande and his ministers agree on a 30% pay cut, as promised in campaigning
  • Prime Minister Jean-Marc Ayrault asks for a report on the state of French public finances
  • New Finance Minister Pierre Moscovici says an ambitious strategy for growth is needed
  • Hollande's new government stresses its commitment to its European partners

Newly appointed Finance Minister Pierre Moscovici said Thursday that France would not ratify a European pact on budget discipline if it does not include measures to boost growth.

Moscovici said an "ambitious" strategy for growth was needed, in an interview with CNN affiliate BFM-TV.

The fiscal pact was signed by most European leaders late last year, and Germany, the economic powerhouse of the region, has said it is not up for renegotiation.

Moscovici said French President Francois Hollande, sworn into office two days ago, was well aware of the gravity of the crisis facing Europe.

But the new Socialist government would stick to the campaign promises made by Hollande, he said, including his pledge to incorporate a "growth dimension" into the fiscal compact.

Holding its first Cabinet meeting Thursday, the government agreed to scrutinize public spending and review all Cabinet ministers' wages, spokeswoman Najat Vallaud-Belkacem said.

Hollande hopes Greece stays in eurozone
Hollande hopes Greece stays in eurozone


    Hollande hopes Greece stays in eurozone


Hollande hopes Greece stays in eurozone 04:19
Hollande sworn in as French president
Hollande sworn in as French president


    Hollande sworn in as French president


Hollande sworn in as French president 03:43
Building through austerity in France
Building through austerity in France


    Building through austerity in France


Building through austerity in France 08:03

"The government is aware of the difficulties we face, in particular in terms of our public accounts," she told reporters after the meeting at the Elysee Palace.

Prime Minister Jean Marc-Ayrault has asked the French Court of Auditors for a report "on the state of our public accounts," she said.

The Cabinet also agreed on a salary cut of 30% for ministers and the president, in line with a campaign promise by Hollande, Vallaud-Belkacem said.

The salary reduction would be retroactive to May 15, after the law is passed by the National Assembly in June, she said.

The cut means the gross salary of the prime minister and president will drop from 21,300 euros to 14,910 euros ($18,970) a month, a government statement said. A minister will earn a gross wage of 9,940 euros ($12,650) a month, rather than the current 14,200 euros.

Hollande stressed the need for the government to be efficient and to set a good example in its own practices, the statement said.

The 17 men and 17 women who make up the government posed for a "family photograph" before getting down to business, BFM-TV reported.

Speaking earlier as he took over as finance minister from Francois Baroin, Moscovici said the government's focus would be on the Greek crisis, the consolidation of the eurozone and a reorientation of European efforts in favor of growth.

He added that he is a "committed European."

"We are conscious that we can do nothing alone. We must work together with all our partners, and above all with Germany and the European institutions," Moscovici said.

Foreign Minister Laurent Fabius also stressed his commitment to Europe on BFM-TV.

"I feel deeply European, but we need a different Europe, a Europe that is much more concentrated on employment," he said.

The pact, championed by German Chancellor Angela Merkel and former French President Nicolas Sarkozy, is designed to increase fiscal discipline and prevent a future crisis by ensuring that governments respect deficit rules and do not overspend.

Hollande's first trip as president, made hours after his inauguration Tuesday, was to Berlin, where he met with Merkel to discuss the economy.

"I said that my wish is that growth is not an empty phrase, that it is something which, in reality, is happening," Hollande told reporters at a joint news conference with Merkel after the talks. "Because, without growth, we can't do whatever we want, we won't reach the goals which we want to -- and to reduce the debt and deficit."

He said the best solution would be to "put everything on the table" on May 23, when the region's leaders plan to meet next.

Speaking earlier this month, Merkel said that she was in favor of growth but that it must be sustainable, rather than programs made on the back of more debt.

Increased competitiveness is the key to sustainable growth, she said.

Voters in France and Greece, where political turmoil continues after an election failed to produce a government, are the latest in Europe to express their unhappiness about the policy of austerity.

As Greek politicians set a new election date Wednesday, Merkel said she regretted the suffering of the Greek people in the face of harsh government budget cuts.

"It's very bitter, obviously," she said of the austerity measures that have left some Greeks struggling to pay for food or utilities.

But, she said, "Sacrifices had to be made. ... I think these are necessary measures that had to be taken."

Merkel, a champion of forcing governments to balance their budgets in order to promote stable economic growth in Europe, did offer possible assistance to Greece.

"Europe needs to show solidarity and help, particularly with growth, unemployment and development," she said.