EU could give France until 2015 on budget: sources

21st November 2014, Comments 0 comments

The EU could delay a decision on France's budget overshoot until early 2015 instead of making a ruling next week as expected, sources said on Friday.

Under new powers given to Brussels during the eurozone debt crisis, the European Commission is set to deliver official opinions on euro government budget plans for next year.

Last month, France and Italy barely avoided having their budgets humiliatingly sent back for serious breaches, with France set for a deficit of 4.3 percent of GDP in 2015, way above the EU ceiling of 3 percent.

The Commission, the EU's executive branch, was expected to deliver the detailed opinions next Thursday or Friday.

But a European source told AFP that the sensitive decision on how to handle France, the eurozone's second biggest economy after Germany, may be put off to early next year.

Another source said the Commission was waiting for firmer proposals from Paris.

If France fails to do what the EU asks, it could face sanctions and penalties, a measure never before inflicted on a founding and powerful member of the 18-nation single currency bloc.

The poor state of the French economy sent the EU into a storm on Friday, with deep divisions emerging over how to handle the Paris government's failure to meet its commitments to Brussels.

Germany's Commissioner Guenther Oettinger wrote an article in French daily Les Echos and the Finiancial Times in which he criticised France for breaking the rules and failing to bring in reforms.

"It would not be credible to extend the deadline without asking for very clear, concrete steps in return," said Oettinger, who is close ally of austerity-touting German Chancellor Angela Merkel.


© 2014 AFP

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