French ministers in Germany to thrash out budget that EU will buy
Issued on: Modified:
France’s budget and economy ministers are to meet their German counterparts in Berlin today, to discuss boosting growth and investment. The German weekly Der Spiegel reports that the two countries are negotiating a deal about France’s draft 2015 budget, which could be rejected by the European Commission.
Both countries deny reports of a secret deal that would enable Paris's draft 2015 budget to be accepted by the EU, even though it breaks past deficit-cutting commitments.
But according Der Spiegel, under the agreement, France would provide the Commission with a detailed roadmap for deficit reduction and structural reform, and Germany would overlook the fact that the budget is based on a deficit that exceeds the 3 percent of GDP.
The draft budget has a deficit of 4.3 percent of GDP. Under new rules, the Commission has the right to reject this budget, and eventually fine France for not complying.
But it would appear that Germany does not want to see France sanctioned, as it would hurt Franco-German relations.
France argues that getting to a deficit of 3 percent of GDP would involve counter-productive austerity measures that would hurt growth. And German Chancellor Angela Merkel, is under increased pressure to take a less rigid stance.
Asked whether he thought the Commission would accept Paris' draft proposal, French Economy minister Emmanuel Macron replied " I have no doubt about this." The Commission has until the end of this month to decide what to do.
Daily news briefReceive essential international news every morningSubscribe