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Economy

ORIGINAL FRENCH ARTICLE: Rapport du FMI : les œillères de Moscovici

by anonymous

IMF Report: Moscovici’s Blinders

Translated Thursday 15 August 2013, by Gene Zbikowski

Pierre Moscovici believes himself to be in agreement with the International Monetary Fund (IMF), which, in its annual report on the French economy, is inviting France not to slow a possible economic recovery with overly sharp austerity. But the Minister of the Economy makes no mention of all the free trade bias and the destruction of the welfare state contained in the report.

In the conclusions to its annual review of the French economy, published on August 5, the IMF invites France to soften its austerity measures in 2014 – maintaining the budget cuts, but abandoning the tax increases. Pierre Moscovici intends to follow these recommendations. In a communiqué, he “repeats that the draft finance bill for 2014, which will be tabled in September, will continue the effort to put the public finances in order while sustaining growth. He will favor savings on expenses over increases in obligatory debits.” Pierre Moscovici thus points out “a great convergence in views with the IMF as to the diagnosis and the analysis of the risks that weigh down economic activity in Europe and in France.”

“Between free trade blindness and contradictions”

Pierre Moscovici also welcomes the changed attitude of the IMF and the European institutions, which, according to him, are turning their backs on “generalized austerity policies.” This is a very poor reading of the IMF’s conclusions. Thus, the IMF invites the French government to “pursue and even accelerate the structural reforms” to put an end to “rigidity in the labor market, brakes on economic growth and on the competitiveness of companies.” At the head of the IMF’s list of urgent reforms: retirement pensions (without increasing social security contributions) and dismantling minimum wage laws.

The CGT trade union confederation is not mistaken. “Once again, the International Monetary Fund is acting as the advocate of the free trade policies and the austerity policies which have plunged many countries into unprecedented social crises,” the CGT said. “The IMF, which moreover wound up recognizing the failure of its recommendations for the 2010 Greek bailout plan, is recommending the same remedies for France!” For the CGT, “the French government would do well not to follow the IMF’s recommendations and to change direction, notably by ending the tax breaks granted to companies, without demanding anything in return…”


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