France says conditions right for deficit target delay

22nd February 2013, Comments 0 comments

France is justified in seeking a delay from the EU in the requirement to cut its public deficit to 3 percent of GDP this year, Finance Minister Pierre Moscovici said on Friday.

Moscovici said the "conditions were right" for seeking the delay, after the European Commission earlier Friday slashed its growth forecast for France to 0.1 percent this year and said the deficit would come in at 3.7 percent of GDP.

The figure for this year, when France was due to get back within the EU's ceiling of 3.0 percent of output, is worse than the 3.5 percent previously tipped, and leaves Socialist President Francois Hollande looking for special leeway from Brussels.

European Union Economy and Euro Commissioner Olli Rehn had said that France could be given more time to meet its commitments as Spain and others have been over the three years of the debt crisis.

"If the expected negative economic headwinds bring significant, unfavourable consequences for public finances, the (EU's) Stability and Growth Pact allows for the deadline (for France) to be pushed back to 2014," he said.

Countries that are judged to not be making sufficient efforts to bring their deficits back under the threshold can face fines.

Hollande has previously ruled out taking making additional severe cuts to spending in an attempt to meet the 3.0 percent deficit target this year, arguing it would further deepen France's recession and aggravate its fiscal problems.

Moscovici said Friday that France doesn't want to "add austerity to the recession."

The minister also told reporters he hoped that growth will be higher than 0.1 percent this year.

© 2013 AFP

0 Comments To This Article