Terrorist Attacks Will Not Impact France’s Financial Commitments
The terrorist attacks in Paris on the 13th of November were the most deadliest attack on French soil and those attacks sent shockwaves throughout Europe. France and Belgium have been on high-alert for the past 10 days as authorities conduct raids in an effort to flush out the remaining terrorists and arrest the mastermind.
France’s President Francois Hollande has vowed to be ruthless in its response against ISIS and has now committed to creating 5,000 jobs in the security forces and stated that there will be no defence cuts till 2019 as Hollande wants to do everything in his power to ensure that his country is well staffed and fully equipped to handle any future threats. This new commitment to security and defense is bound to increase France’s spending and cause the country to surpass its 3% GDP EU budget deficit target.
France was already going to have budget deficits that were over the EU target based on its draft budget proposal which was submitted in October 2015. France had overlooked the recommendations given by the finance ministers of the European Union on managing structural deficit cuts and the Paris attack will only increase the deficit. However Emmanuel Macron, the finance minister for France stated that his country realizes that they are at the center of Europe and play a key role in the Eurozone and hence would keep its financial commitments.
In a statement, Macron said
We will be making concrete proposals, continue working to have a Franco-German initiative in response to what has happened. All of Europe is facing jihadi aggressions and it is all of Europe that needs to fight and react. Exceptional circumstances have justified making exceptional decisions. They have been presented to the European Commission. I don’t think it’s likely to change anything.
The EU Economics Commissioner and the European Commission President were in agreement that exceptions should be made for France in light of the Paris terrorist attacks and said that they EU finance ministers needed to show compassion and understanding as they continued to do their jobs as accountants.
Philippe Gudin an analyst at Barclays stated that the attack in Paris had affected Europe in a big way as it slowed down consumption as individuals were warned to remain indoors and not gather in public places. Gudin stated that the tourism industry in France would be the most affected and it will take quite awhile for the industry to recover considering the fact that this was the second terrorist attack in France in 2015.
