Friday

30th Sep 2016

France to reach EU decifit targets 'without' austerity

  • Moscovici: 'Without austerity measures. Yes, we'll do it' (Photo: ec.europa.eu)

France has said it will manage both to reach its EU-inspired targets on deficit reduction and do it without introducing new austerity measures.

Speaking in Brussels on Monday (4 June) finance minister Pierre Moscovici said he wanted to convince EU officials of the "seriousness, responsibility and credibility" of the government's programme.

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"I told [EU economic affairs commissioner Olli Rehn] that not only is it doable but it will be done," he said referring both to the 2013 target to reduce France's budget deficit to three percent and have a balanced budget by 2017. "We take seriously the demands for budget credibility that the commission is asking of us and which the situation demands of us," he added.

The European Commission recently expressed doubts about next year's target.

In a detailed analysis of the French economic and budgetary situation published last Wednesday (30 May),the commission suggested the country would miss the goal unless it accelerated deficit-cutting measures. France was also warned of the "serious imbalances" in its economy as its exports drop and competitiveness declines.

Qualifying the finding of the analysis, Moscovici suggested it was made "partly" on the basis of plans made by the previous centre-right government, elected out of office at the beginning of May.

Without austerity

The socialist politician, on his first trip to Brussels in his new role, said Paris would manage to bring down its deficit using its own "ways and means" but without introducing further austerity measures.

"Without austerity measures. Yes, we'll do it" he said when asked about reaching the target.

For his part, Rehn was more peaceable than in previous commission statements about France. "I welcome this commitment to achieve this important goal, which is quite feasible," he said.

A senior EU diplomat recently noted that the "whole credibility" of the EU's enhanced budget powers and its strengthened euro rules lies with France - the eurozone's second largest economy and a country that has not had a balanced budget since 1974.

Looking ahead to the leaders summit at the end of the month, Moscovici said he hoped the meeting would lead to a "new phase in European construction."

Both he and Rehn spoke out in favour of allowing the permanent eurozone bailout fund (ESM), due to come into force around the beginning of July, to lend directly to banks. Currently it can only lend to governments pushing them further into debt.

"We are also in favour of this banking union," said Moscovici, adding that he hoped the issue will be dealt with during the 28-29 June summit - an increasingly high-stakes meeting meant to discuss future short- and longterm integration steps for the 17-nation eurozone.

New EU rules on financial products in limbo

A feud between MEPs and the EU commission is threatening to derail financial services regulation that would protect consumers from misleading investment products.

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