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France

France not to meet EU deficit rule until 2017, finance minister

French Finance Minister Michel Sapin with Germany's Wolfgang Schäuble
French Finance Minister Michel Sapin with Germany's Wolfgang Schäuble Reuters/Charles Platiau

France will not meet the European Union’s requirement of a public deficit of under three per cent of output until 2017, Finance Minister Michel Sapin said on Wednesday, pushing the deadline back by two years.

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With no respite for France’s sluggish economy, Sapin announced growth of only 0.4 per cent this year and 1.0 per cent in 2015.

The government’s target for the deficit will be 4.4 per cent of output in 2014 and will drop slightly to 4.3 per cent in 2015, he said.

Dossier: Eurozone in crisis

The government has made meeting the EU requirement a key aim of its economic policy, cutting public spending and raising indirect taxes, and previously won a two-year delay to 2015 from Brussels.

Sapin promised not to raise taxes further but pledged that the planned 21 billion euros of savings on real trend spending planned for 2015 will be made, as will the 50 billion euros planned to be made before 2017.

The drive to meet the EU demands caused to a split in the government, with former economy minister Arnaud Montebourg slamming "austerity policies", leading to last month's cabinet reshuffle.
 

 

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