Tuesday

17th Jan 2017

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.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

"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.

Stakeholders' Highlights

  1. Caritas EuropaEU States to Join Pope Francis’s Appeal to Care for Migrant Children
  2. UNICEFNumber of Unaccompanied Children Arriving by sea to Italy Doubles in 2016
  3. Nordic Council of Ministers"Nordic Matters" Help Forge Closer Bonds Between the UK and the Nordic Region
  4. Computers, Privacy & Data ProtectionThe age of Intelligent Machines: join the Conference on 25-27 January 2017
  5. Martens CentreNo Better way to Lift Your Monday Blues Than to Gloss Over our Political Cartoons
  6. Dialogue PlatformThe Gulen Movement: An Islamic Response to Terror as a Global Challenge
  7. European Free AllianceMinority Rights and Autonomy are a European Normality
  8. Swedish EnterprisesHow to Create EU Competitiveness Post-Brexit? Seminar on January 24th
  9. European Jewish CongressSchulz to be Awarded the European Medal for Tolerance for his Stand Against Populism
  10. Nordic Council of Ministers"Adventures in Moominland" Kick Off Nordic Matters Festival in London
  11. PLATO15 Fully-Funded PhDs Across Europe on the Post-Crisis Legitimacy of the EU - Apply Now!
  12. Dialogue PlatformInterview: Fethullah Gulen Condemns Assassination of Russian Ambassador to Turkey