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France Urges Cooling Of Austerity, Focus On Growth

"It has to be done in a way that people, citizens can recognize the reform process, can support it finally and can see some hope, some light at the end of the tunnel, which is not the case today," said the European Parliament's center-left caucus leader, Hannes Swoboda.

He warned that continuing the harsh enforcement of European debt rules will not only worsen the recession, but eventually threaten Europe as a whole.

"More and more citizens today identify Europe with austerity, unemployment and perhaps even authoritarian dominance from outside," Swoboda said.

Moscovici acknowledged France will miss its deficit reduction target this year as the economy is expected to stall, but still aims to get it below the EU's limit of 3 percent of economic output next year.

"Under the current conditions it would worsen the recession to push toward the 3 percent (ceiling)," he said. France hopes the EU Commission, the bloc's executive arm that monitors compliance with debt rules, will grant the country a delay of one year to reach its deficit target, he indicated.

The European Commission last month lowered its 2013 economic growth forecast for France to a meager 0.1 percent.

New data on Thursday also showed that the unemployment rate in France is still rising. It was up to 10.6 percent in the fourth quarter of 2012 from 10.3 percent in the previous three-month period, according to France's statistics agency.

In Britain, however, Prime Minister David Cameron gave a stern defense of his government's austerity policies of tough spending cuts and tax increases.

"The very moment when we're just getting some signs that we can turn our economy round and make our country a success...is the very moment to hold firm to the path we have set," he said, pointing to a recent uptick in exports and lower unemployment.

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