The European Commission grants an additional two years in France to reduce its deficit to 3% of GDP and evaluate its efforts in May. Belgium and Italy will not be the subject of an excessive deficit procedure
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France will get a further period of two years to bring its deficit to 3% of GDP, announced Wednesday the European Commission. Brussels has indeed set a new deadline in 2017.
This is the third time enjoyed by France to bring its deficit in European nails. The scenario of a further period of three years recently circulated in Brussels and would have enabled France to circumvent the election deadline of 2017.
“The macroeconomic situation s’ is not substantially improved, a lack of competitiveness remains in France, the reforms already undertaken in the right direction, but this is not enough in today, “said Pierre Moscovici in French, European Commissioner for Economic and Financial . Adding that France will present in April, “a national program of ambitious and comprehensive reforms.”
The government forecasts a 4.1% deficit in 2015 and 2016. “France must make an effort structural savings of up to 0.5% of GDP” recalled the Vice President of the Commission in charge of the Euro, Valdis Dombrovskis, while it does far provided only 0.3%. The discussions were ongoing and constructive Michel Sapin, said Pierre Moscovici. The finance minister has written a letter to the Commission in which it undertook to achieve these 0.5% by the end of the year.
The efforts implemented in May will be reviewed within three months after the Council of Europe approves the recommendations. Without satisfactory effort, excessive deficit procedure could be initiated. The case of France is “more complicated” than that of Italy or Belgium, said Valdis Dombrovskis. The Hexagon should “accelerate fiscal and structural reforms.”
A policy debate was held on Wednesday between European Commissioners. The prospect that a period of three years bristled some within the Commission. Monday night, Commissioner Gunther Oettinger German in charge of the Digital Economy, has protested in Handelsblatt “the credibility of the Stability Pact is at stake”, lamenting that “France is still not where it should be “.
As for Italy and Belgium, the Vice-President of the Commission in charge of the euro announced not to initiate excessive deficit procedure, taking into account both the overall economic situation and fiscal policies in these countries. However, these will be subject to specific monitoring.