Luxembourg PM defends French, German deficits

9th December 2004, Comments 0 comments

FRANKFURT, Dec 9 (AFP) - Luxembourg Prime Minister Jean-Claude Juncker said Thursday the size of a country's contribution to the European Union budget should help determine the calculation of public deficits and their compliance with the EU Stability and Growth Pact.

FRANKFURT, Dec 9 (AFP) - Luxembourg Prime Minister Jean-Claude Juncker said Thursday the size of a country's contribution to the European Union budget should help determine the calculation of public deficits and their compliance with the EU Stability and Growth Pact.

"If a country goes into deficit, you have to look at the size of its contributions to the European Union. That would be an element of the evaluation," Juncker told Thursday's edition of Die Welt newspaper.

Reform of the Stability and Growth Pact is expected to be one of the major issues when Luxembourg takes over the rotating presidency of the European Union in January.

Juncker appeared to support the position of Germany and France, which argue that some budgetary expenditure should be deducted when calculating public deficits.

In particular, Germany believes its net contribution to the EU budget, which is the biggest of all EU members, should be deducted from its public deficit when evaluating its compliance with the pact.

Juncker told the newspaper he would like to see public deficits calculated differently, according to a seven- or eight-point "catalogue of evaluation".

As well as taking into consideration the size of a country's contributions to the EU budget, Juncker said he also believed mitigating factors such as "external pressures" and whether a country is undergoing structural reform should also be criteria.

Germany's annual public deficit has surpassed the EU limit of 3.0 percent of gross domestic product for the past three years and many observers doubt that the German and French public deficits will fall below 3.0 percent in 2005, given weaker-than-expected economic growth.

© AFP

Subject: French News

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