PARIS (MNI) – As president of the G20, France will aim for a more
stable international currency system so that the euro will not be the
“victim” of monetary policy in the US and China, Finance Minister
Christine Lagarde said Monday.

Confirmed in her ministerial post after Sunday’s cabinet reshuffle,
Lagarde also called for an overhaul of domestic fiscal rules in order to
enhance competitiveness.

“Of course we must work on the euro,” she said in a radio
interview. “Our task is to create an economic environment favorable for
foreign trade.” But it is not enough to exclaim that “the euro is too
strong.”

Rather, the next G20 must bring “a real transition toward a new
mode of governance of key international issues,” Lagarde said. It must
“lay the foundation of a new monetary system” which assures greater
predictability and a better balance among currencies.

“We cannot be the victims of large movements between the US and
China that agitate the international monetary sphere,” she declared.

On the domestic front, top priority will be given to a revision of
all aspects of the tax system, with the goal of convergence with
Germany, “because we must protect France’s competitiveness” and avoid “a
kind of fiscal rivalry” to attract companies, the minister said.

The goals of this fiscal reform will be to encourage companies to
operate in France and to favor investment without creating a burden for
employment, she explained.

Lagarde said she remained “desperately optimistic” that GDP growth
of 2% can be attained next year, given the momentum at the end of this
year and the reforms undertaken to “liberate economic forces.”

After a slowdown in GDP growth to 0.4% in 3Q, “I expect a better
performance for 4Q…despite the social movements that clearly affected
economic activity,” she said.

Concerning Ireland’s deficit woes, Lagarde confirmed that there had
been as yet “no request for aid” from Dublin. Noting the additional
measures the government has taken to reduce its deficit, she stressed
that “this plan must clearly be realized and we all must pay close
attention to the restructuring now under way in Ireland.”

–Paris newsroom +331 4271 5540; Email: stephen@marketnews.com

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