Jul 10, 1:56 PM EDT

France pleads for new EU economic strategy


World Video

Buy AP Photo Reprints
Multimedia
A district summary of the Beige Book
Measuring economic stress by county nationwide
Mall malaise: shoppers browse, but don't buy
Unemployment by the numbers
Family struggles with father's unemployment
Saying an affordable goodbye
Hard times hit small car dealer
Latest Economic News
S&P 500 ekes out record high as earnings roll in

US economy, though sluggish, may now be sturdier

How the Dow Jones industrial average did Wednesday

Delta and Apple are big market movers

US stocks drift higher following mixed earnings

IMF sees US growth at weakest since recession

Retail trade group reduces annual sales forecast

US stocks drift following mixed corporate earnings

Stocks open mostly lower following mixed earnings

Bank of England: rates to rise only gradually

Interactives
Greece's Debt Threatens to Spread
State budget
gaps map
Auto industry problems trickle down, punish Tennessee county
Women give old Derby hats a makeover in tough economy
S.C. town deals with highest unemployment in South
How mortgages were bundled and sold as securities
Tracking the $700 billion financial bailout
Tracking the year's job losses
State-by-state foreclosures since 2007
Credit crisis explained
Presidents and their economic legacies
Lexicon of the financial crisis
Americans' addiction to debt
Interactive
Surviving Normandy
E. Dehillerin
Truffles Draw Crowds, High Prices
Transportation Workers Strike in France
Sarkozy, Wife Divorce
Sarkozy's Inauguration
France's New President
Latest News
Thousands attend tense pro-Gaza march in Paris

Amid sanctions, France in warship sale to Russia

Minibus crash in France kills 5 children, 1 adult

Court rules France responsible in toxic algae case

Artistic director of women's wear leaving Hermes

PARIS (AP) -- France's economy minister is blaming European authorities for the lack of growth in France and Europe, and says it's time for a new economic policy that shuns austerity.

Arnaud Montebourg, in a closely watched speech Thursday on economic recovery, also suggested France may seek more time from EU authorities to bring down its debt.

France, with Europe's No. 2 economy, is holding back the rebound across the continent. Its growth has been flat for two years, and unemployment continues to rise. French President Francois Hollande has promised to nurture a more business-friendly environment, in hopes of turning the tide of investment and persuading companies to hire.

Montebourg said the policy of cutting public deficits in Europe and France was "morally right but economically wrong" and that austerity measures are a "European disease" that stunted eurozone growth.

Montebourg also said the European Central Bank should do more to weaken the euro in order to boost growth.

He vowed the government would make 50 billion euros ($68 billion) in spending cuts, as planned, but proposed to use only one-third of the money saved to reduce the deficit, with the rest going to cut taxes.

Montebourg's speech is part of a larger strategy by Hollande and the Socialist government to mollify their hard-left electoral base and lay the groundwork for long-awaited economic reforms.

In a speech Sunday intended to bring around rebellious factions within the party, Prime Minister Manuel Valls said the time was long past for half-measures and demonizing capitalists.

"What does it mean to be a leftist? Is it to raise public spending? Is it to raise taxes?" he said. "Who will create jobs if not companies?"

The government is pushing for more flexibility in the EU budget rules, and analysts agree that France will probably fall short of its commitment to bring the budget deficit to the limit of 3 percent of gross domestic product next year.

Meanwhile, Socialist Pierre Moscovici, former finance minister of Hollande, is a candidate to become the next European economics commissioner, one of the most powerful positions in the EU.

---

Lori Hinnant contributed to this report.

© 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Learn more about our Privacy Policy and Terms of Use.