Sarkozy says 'determined' on balanced budget rule

7th September 2011, Comments 0 comments

French President Nicolas Sarkozy insisted on Wednesday he was determined to push through a balanced budget amendment "golden rule" despite reports that he might drop the contested plan.

"The president's determination on the golden rule is intact," an aide at Sarkozy's Elysee palace said.

The right-wing president wants to change France's constitution to include the "golden rule" -- following the example of Germany and Spain -- to reassure rattled markets and ensure France keeps its triple-A sovereign debt rating.

But economists complain the rule is too complicated and the opposition Socialists say they will block the measure, which needs to be backed by a three-fifths majority at a special joint congress of both houses of parliament.

Sarkozy has a majority in both houses but does not have the three fifths required to change the constitution.

Both Liberation and Le Figaro newspapers said Wednesday that Sarkozy, who is expected to stand for re-election next April, would not run the risk of a vote unless he was certain of the required majority.

The "golden rule" announced in March by the Sarkozy government is not actually a balanced budget amendment per se, but a renewable law that would establish deficit targets for the subsequent three years.

If the targets were missed, France's constitutional council could then strike down spending laws such as the annual budget and or social security financing.

© 2011 AFP

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