PARIS (Reuters) - European nations must use all the flexibility allowed by EU budget rules to ease fiscal tightening, and the euro needs to weaken further to revive growth, French Prime Minister Manuel Valls said on Tuesday.
In a speech to members of parliament ahead of a confidence vote, Valls said that European countries faced weak growth and a risk of deflation, which is holding back public revenue in France.
"The pace of deficit reduction in Europe must ... be adapted. This means using all of the flexibility allowed by the (EU) Stability and Growth Pact," Valls said.
He added that a recent ECB interest rate cut had helped reduce the euro's value against other currencies but it was necessary to go further.
"The euro zone is decoupling from the rest of the world," he said.
(Reporting by Mark John; Writing by Leigh Thomas; Editing by James Regan)