France could meet 2005 deficit target: Almunia

12th July 2005, Comments 0 comments

BRUSSELS, July 11 (AFP) - EU Economic and Monetary Affairs Commissioner Joaquin Almunia said Monday it was "still possible" for France to meet its target of reining its strained public finances to within EU limits this year.

BRUSSELS, July 11 (AFP) - EU Economic and Monetary Affairs Commissioner Joaquin Almunia said Monday it was "still possible" for France to meet its target of reining its strained public finances to within EU limits this year.

"It is still possible by the end of 2005 (that) the deficit in France will have been brought below the reference (level) of three percent," he told a news conference after a meeting of eurozone finance ministers here.

The EU's stability and growth pact says that member states must keep their deficits below three percent of output, although the fiscal rule book was revised earlier this year to give countries more leeway if they overshoot the mark.

But Luxembourg Prime and Finance Minister Jean-Claude Juncker, who chaired the meeting, said that during "the course of next year France is going to have to take further measures to fully respect the deficit limit".

Almunia said the situation in Germany "looks a lot worse" that that in France, as even Finance Minister Hans Eichel had predicted a 2005 deficit of 3.7 percent of output -- well over the limit.

He said the European Union's executive commission, which polices deficits in the EU, would take a decision on taking action over the French and German deficits sometime at the end of September.

In the case of Germany, that could mean reactivating the EU's excessive deficit procedures against the country, which was frozen in January based on evidence at the time that Berlin would bring the deficit below the three percent limit this year, after overshooting for the three previous years.

Almunia also confirmed that the EU finance ministers, who joined their eurozone counterparts on Tuesday, would endorse a call from the European Commission to Italy to bring down its deficit within two years.

Juncker said that "the Italian economy is going through a very prolonged low growth period so it seems only fair" to give the country until 2007 to comply with the stability pact.

Copyright AFP

Subject: French news

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