“It may be reasonable to extend the deadline by two years and to correct the excessive deficit by 2015 at the latest”, said Rehn, adding that France needed to implement structural economic reforms swiftly in order to restore growth and competitiveness, and that the government needed to specify “further actions to meet the objectives in fiscal policy”.
Rehn said that the Commission was more pessimistic about France's economy than was the French government. He said that the French economy would shrink by 0.1 per cent this year. A previous forecast was for 0.1 per cent growth. “France is a core country for the eurozone, for the eurozone in its entirety”, Rehn said. “France [needs to] put a renewed and strong emphasis on structural reforms in the labour market...to unblock its growth potential and create jobs.”
Rehn also had warnings for Spain. He said that its deficit-reduction target could be extended by two years “in view of the worse economic outlook”. The Commission is also considering putting back Slovenia's deadline – but only once a “broad-based reform strategy, addressing the country's imbalances” is implemented.
Rehn said that Belgium's economy had “come to a standstill”, but refused to say whether Belgium would be the first country to be fined for missing its deficit target. “To my mind the essential thing is to bring the public finances back on track”, Rehn said.
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