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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”.
However, Emmanuel Macron, France’s economy minister, warned on 2 March that the €50 billion savings already announced was the limit. Following a meeting with Frans Timmermans, the European Commission vice-president for better regulation, Macron said: “We will make the €50bn savings we have announced, but no more, and it will be enough to get our deficit below the 3% bar.”
Manuel Valls, the prime minister of France, is to visit the European Commission on 18 March.
Full article on European Voice (subscription required)