Concerned that Europe will not be able to compete on equal terms with China and the United States, French Prime Minister François Bayrou called on the European Central Bank (ECB) to continue cutting interest rates.
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| France's unemployment rate has started to rise again and economic growth fell by 0.1% in the final quarter of 2024. (Source: Reuters) |
The ECB has just cut interest rates by 25 basis points, marking the fifth reduction since June 2024, taking the deposit rate from 3.0% to 2.75%. However, this is still much higher than before the inflation shock, caused by the Ukraine crisis and the subsequent rise in energy prices.
French Prime Minister François Bayrou has called on the ECB to speed up the pace of interest rate cuts to boost economic growth in Europe, as inflation returns to normal levels. If the ECB does not cut interest rates, Europe will not be able to compete on an equal footing with China and the United States.
Inflation in France is currently below the ECB's 2% target, compared to the eurozone's 2.4%. French unemployment has started to rise again and economic growth is expected to contract by 0.1% in the final quarter of 2024.
Some economists question whether the ECB is too slow to cut interest rates, given that they remain at growth-limiting levels. Meanwhile, the eurozone economy is on the brink of recession, Germany’s economy is contracting and inflation is cooling.
Bayrou said he would use special constitutional powers to pass the French budget as scheduled, Reuters reported. France entered 2025 without a budget due to a change in government.
Source: https://baoquocte.vn/lo-ngai-giam-loi-the-canh-tranh-thu-tuong-phap-keu-goi-ecb-giam-lai-suat-302900.html
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