French Finance Minister hails stability pact

21st March 2005, Comments 0 comments

PARIS, March 21 (AFP) - French Finance Minister Thierry Breton welcomed on Monday a weekend agreement that loosened fiscal rules in the European Union's stability pact, saying it would boost funding for research and development.

PARIS, March 21 (AFP) - French Finance Minister Thierry Breton welcomed on Monday a weekend agreement that loosened fiscal rules in the European Union's stability pact, saying it would boost funding for research and development.

"This is great news for Europe, we reached agreement on a substantial revamping of the Stability and Growth Pact and all French requests were taken into account," Breton told the public radio France Info.

He said the pact, which underpins Europe's single currency, was now "political and economical, and no longer technocratic".

After 12 hours of negotiations EU finance ministers clinched a deal late Sunday on reforming the pact.

While leaving the two key rules - that public deficits should not exceed three percent of gross domestic product and public debt should not go above 60 percent of GDP - intact, the deal boosted measures aimed at preventing countries from overspending and reinforced the EU's executive commission's authority to police the deficits.

Breton underscored the continued emphasis on keeping deficits below three percent of GDP, but noted: "If we make a particular effort in one area, we can extract that from the deficit."

The finance minister stressed that France needed to "catch up with respect to research and development."

Pointing to substantial US investment in those areas, Breton said: "You have to know what you want, if we want to try and make up the difference we must give ourselves the political means."

The French minister also mentioned the possibility of excluding aid to developing countries and the cost of military interventions, "in particular those under a UN mandate".

© AFP

Subject: French News

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