Germany, France to jointly boost EU investment

Germany and France said on Tuesday that they welcomed the investment plan recently announced by the European Commission and would cooperate to boost investment in infrastructure, digital networks, energy efficiency, as well as to initiate single markets in several sectors.

"France and Germany welcome the Commission's Investment Plan for Europe ... and are fully committed to its rapid implementation and to make it as strong as possible," said the two sides in a joint paper issued in Berlin.

Earlier, finance and economy ministers of Germany and France, together with top officials from the two countries' central banks held a meeting in the German capital.

The two sides said they were "fully aware of their responsibility" in contributing to the 315 billion euros (about 390 billion U.S. dollars) investment plan announced by the new EC president Jean-Claude Junker on November 26th.

They said the investment needed to be "viable" and "targeted" and they agreed that priorities should be on transportation infrastructure, digital networks and contents, energy efficiency, energy transmission, smart grids and renewable energy, education and research and innovation.

Germany and France would examine the feasibility of investing in joint projects in renewable energy and encourage the industry to join research on electricity mobility and battery technologies, the paper showed.

The two largest economies in Europe also aimed to form a partnership to provide smart digital networks in sectors such as education, health, transport, energy and public administration, and to build more broadband networks in areas along the Franco-German border.

They invited the European Union to create single markets in energy, digital and capital markets via commensurate regulation or deregulation in order to open new investment opportunities.

Besides investment, the two sides said structural reform and growth-friendly fiscal consolidation are also important for boosting growth in Europe.

While Germany reiterated its plan to spend an additional 10 billion euros from 2016 until 2018 in areas such as infrastructure and energy efficiency, France said it would "do everything necessary" to meet EU's budget rules.

The European Commission said last Friday that seven EU member states including France were at risk of non-compliance with the provisions of the Stability and Growth Pact, which requires member states to limit their budget deficit to under 3 percent of their gross domestic product (GDP).

French government expected its deficit-to-GDP ratio to stay at 4.4 percent this year and 4.3 percent in 2015.

Germany, meanwhile, was also under pressure from its EU partners and organization abroad such as International Monetary Fund to exploit its fiscal scope to boost its economy which already showed a lack of momentum.

The federal government, however, insisted to stick to its target of reaching budget balance in 2015 for the first time since 1969, and refused to add new borrowings for increasing public investment. Enditem