EU
gives France until 2017 to fix budget deficit
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©
Emmanuel Dunand, AFP file picture| Valdis Dombrovskis, European Commission vice
president for the Euro and Social Dialogue, at the European Commission
headquarters in Brussels on February 18, 2015
Latest
update : 2015-02-25
The EU on Tuesday gave France a further two
years until 2017 to bring its budget deficit back into line with Brussels'
rules, meaning the eurozone's second biggest economy avoids a fine for now.
Paris must however present a reform plan to
Brussels by April to show how it intends to get its finances back in order,
added the European Commission, the executive body of the 28-nation EU.
Italy and Belgium will face no action
because they have made enough progress toward bringing their deficits back into
line with European Union spending regulations that were tightened in the wake
of the eurozone debt crisis, the EU said.
"Today we have decided to propose a
new recommendation to France as to how to address its excessive deficit, and
set a new deadline for it to be below 3.0 percent, this being by 2017,"
the bloc's euro commissioner Valdis Dombrovskis told a hastily-arranged press
conference.
Theoretically, eurozone countries face
penalties if their deficit stays above 3.0 percent of economic output but any
fine against one of the EU's founding members such as France would have been
unprecedented.
In November, the EU gave France, Italy and
Belgium an extra three months to come up with plans to cut their deficits back
below the 3.0 percent of GDP limit.
France, the eurozone's biggest economy
after Germany, had already made two previous requests for an extension, firstly
under the presidency of Nicolas Sarkozy and then under current President
Francois Hollande.
France will have to submit a new economic
reform programme to Brussels in April, EU Economic Affairs Commissioner Pierre
Moscovici said.
"France has already announced reforms
in the past few days. We expect France to present a more complete national
reform programme in April which we will consider in May," added Moscovici,
a former French finance minister.
The new deadline is in politically
sensitive territory during France's next presidential election in 2017.
Feeling the pressure from the EU, Paris in
December revised its deficit forecast for 2015 to 4.1 percent from 4.3 percent,
still way above the EU's 3.0 percent ceiling.
It also revised its estimates for 2016 to
3.6 percent and for 2017 to 2.6 percent.
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