05 March 2015

European Voice: Finance ministers to give France more time to reduce budget deficit

European Union finance ministers will on March 9 approve a European Commission recommendation to give France until 2017 to get its budget deficit under 3% – a delay of two years on the original 2015 deadline.

France will have to reduce the gap between its revenue and spending by 0.5% of gross domestic product (GDP) in 2015.

The Commission says that the measures proposed by the French government would cut the gap by only 0.3% of GDP. Forecasts predict that the deficit will be 4.0% of GDP this year.

Pierre Moscovici, the European commissioner for economic and financial affairs, taxation and customs, said that getting the deficit below 3%, the original target, in 2015 was no longer possible because the macro-economic situation had not improved and France still faced competitiveness problems despite undertaking some reforms.

Valdis Dombrovskis, the European commissioner for the euro and social dialogue, said: “It’s clear that France needs to step up its efforts both on the fiscal and structural reforms side.”

In return for the two-year delay, France has to outline steps to produce a reduction equivalent to 0.5% of GDP within three months of the recommendation being approved by EU finance ministers. Measures already announced would amount to only 0.3% of GDP, according to the Commission. Michel Sapin, France’s finance minister, said last week that France would “respect its commitments to make an adjustment on that level in 2015”.

 

© EURACTIV