Quest for growth prompts new dispute among eurozone finance chiefs over strict deficit rules

BRUSSELS – European finance officials are clashing over whether the 18-nation eurozone’s budget deficit rules are so strict that they choke off economic growth.

France, Italy and others who are struggling to meet the fiscal targets are pushing for more flexibility but are facing an uphill battle because of opposition by the bloc’s economic heavyweight, Germany.

French Finance Minister Michel Sapin said Thursday regarding debt and deficit reduction: “The right rhythm for each of the countries has to be found” to ensure a return to sound finances while also providing “the necessary stimulus for growth.”

But Germany’s Wolfgang Schaeuble said “the exisiting rules provide for sufficient flexibility,” insisting solid public finances and structural reforms will spur growth and job creation.

Eurozone nations have to keep their deficits below 3 per cent of GDP.