Saturday

25th May 2019

France wins two-year reprieve on deficit

  • Are some member states more equal than others? (Photo: Trey Ratcliff)

French finance minister Michel Sapin has indicated that a decision by the European Commission - endorsed Tuesday (10 March) by member states - to give Paris more time to obey EU deficit rules will stave off the rise of extremist political forces.

"Europe is there to help us, it’s not there to punish us,” he said after the meeting. “Every time people talk about punishment, they’re not helping democracy, they’re helping the extremes.”

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

His comments were an apparent reference to the far-right National Front, which is currently topping polls ahead of local elections later this month.

He said Tuesday's decision to give France until 2017 - its third extension to date - to bring its deficit to under the 3 percent of GDP was the result of "good work" by the government.

But the decision has had a political price.

It has given rise to political criticism that the euro rules have been fatally undermined and given others cause to ask for flexibility too. Former EU economics commissioner Olli Rehn last week said the commission should have had the "guts and sense" to tell France it had not carried out enough reforms to justify a reprieve.

Benoit Coeure, a member of the European Central Bank's executive board, told the Financial Times that the eurozone bank is "frustrated" and fears that recently-agreed budget rules - meant to prevent a re-occurrence of the financial crisis - were "unravelling".

He also honed in on the perception that France is being given leeway because it is a big country.

"It's always extremely important in Europe to avoid a situation - or even to avoid the perception - that large countries are treated in a more benevolent way, in a more generous way, in a more flexible way than smaller countries. That would be contrary to the very spirit of European construction."

Ireland speaks up

This perception was raised by both the Irish and Spanish ministers during a meeting of euro finance ministers on Monday.

Irish finance minister Michael Noonan said he had spoken to his German counterpart, Wolfgang Schaeuble, to say Dublin also wants flexibility in the rules - with Berlin's tacit green light seen as key to Paris getting the extra time.

"We need flexibility as well," said Noonan.

He indicated that the commission is applying rules in too technocratic a way and not taking account of "reality" on the ground.

Dublin wants to have an expansionary budget in autumn this year, but feels constrained by how the euro rules are being applied.

"We are moving from the corrective arm of the procedure to the preventive arm because our deficit is going below three percent and new rules apply - and one of them is that you cannot spend more than your growth rate", Noonan said.

Commission officials have calculated the growth rate at 0.6 percent whereas new statistics show that the country - which recently exited a bailout - is growing at 3.5 percent.

Noonan said he wanted "breathing space" for the budget, noting that the country "will still be able to bring the deficit down next year".

He said that so far Dublin sees "no sign" of the rules being enforced unevenly, but indicated this assessment rested on how Dublin's complaint is handled.

"Rules have been applied fairly up until now," he said.

Language hoops

Meanwhile, the wording on the French decision shows the political and linguistic hoops the commission had to go through in order to find that Paris had, as the rules required, taken effective action to cut its budget deficit in 2013 and 2014.

"The available evidence does not allow to conclude on no effective action," it said.

EU gives France until 2017 to fix deficit

The European Commission on Wednesday gave France another two years to bring its budget within EU rules, saying that sanctions represent a "failure".

France to Brussels: we’re reforming

French Finance minister Sapin told MEPs and the commission that his country is changing and shouldn't face sanctions for excessif deficit.

EU top court backs Canada trade deal in ruling

The European Court of Justice ruled on Tuesday that the EU-Canada free trade agreement, and its controversial dispute settlement mechanism, is in line with the bloc's rules.

EU and Japan in delicate trade talks

The Japanese PM comes to Brussels to discuss the first results of the new EU-Japan free trade deal, plus WTO reform - a sensitive topic before he moves onto Washington to face Donald Trump.

News in Brief

  1. UK's May announces June 7 resignation date
  2. Ireland votes for EU election and divorce referendum
  3. Report: May to announce resignation plan on Friday
  4. Leading politicians: time for EU to have female leaders
  5. Poll: Finland's Green party to surge in EU elections
  6. High demand for postal voting in Denmark
  7. Some EU citizens turned away at UK polling stations
  8. Switzerland unlikely to sign draft EU deal

Feature

Romania enlists priests to promote euro switchover plan

Romania is due to join the single currency in 2024 - despite currently only meeting one of the four criteria. Now the government in Bucharest is enlisting an unlikely ally to promote the euro to the public: the clergy.

Trump and Kurz: not best friends, after all

The visit of Austrian chancellor Sebastian Kurz to the White House on Wednesday showed that the current rift in transatlantic relations is deepening by the day.

Stakeholders' Highlights

  1. Vote for the EU Sutainable Energy AwardsCast your vote for your favourite EUSEW Award finalist. You choose the winner of 2019 Citizen’s Award.
  2. Nordic Council of MinistersEducation gets refugees into work
  3. Counter BalanceSign the petition to help reform the EU’s Bank
  4. UNICEFChild rights organisations encourage candidates for EU elections to become Child Rights Champions
  5. UNESDAUNESDA Outlines 2019-2024 Aspirations: Sustainability, Responsibility, Competitiveness
  6. Counter BalanceRecord citizens’ input to EU bank’s consultation calls on EIB to abandon fossil fuels
  7. International Partnership for Human RightsAnnual EU-Turkmenistan Human Rights Dialogue takes place in Ashgabat
  8. Nordic Council of MinistersNew campaign: spot, capture and share Traces of North
  9. Nordic Council of MinistersLeading Nordic candidates go head-to-head in EU election debate
  10. Nordic Council of MinistersNew Secretary General: Nordic co-operation must benefit everybody
  11. Platform for Peace and JusticeMEP Kati Piri: “Our red line on Turkey has been crossed”
  12. UNICEF2018 deadliest year yet for children in Syria as war enters 9th year

Latest News

  1. Irish greens take Dublin in second EU exit poll
  2. EU election results to trigger top jobs scramble This WEEK
  3. Don't tell the Dutch - but Timmermans 'won'
  4. EU says goodbye to May with 'respect'
  5. Strache scandal: how big a hit will Austrian far-right take?
  6. Italy train row exposes competing views of EU
  7. Dutch socialists on top in first EP election exit poll
  8. No usage data kept for EU parliament's 'Citizens' App'

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic commitment to driving global gender equality
  2. International Partnership for Human RightsMeet your defender: Rasul Jafarov leading human rights defender from Azerbaijan
  3. UNICEFUNICEF Hosts MEPs in Jordan Ahead of Brussels Conference on the Future of Syria
  4. Nordic Council of MinistersNordic talks on parental leave at the UN
  5. International Partnership for Human RightsTrial of Chechen prisoner of conscience and human rights activist Oyub Titiev continues.
  6. Nordic Council of MinistersNordic food policy inspires India to be a sustainable superpower
  7. Nordic Council of MinistersMilestone for Nordic-Baltic e-ID
  8. Counter BalanceEU bank urged to free itself from fossil fuels and take climate leadership
  9. Intercultural Dialogue PlatformRoundtable: Muslim Heresy and the Politics of Human Rights, Dr. Matthew J. Nelson
  10. Platform for Peace and JusticeTurkey suffering from the lack of the rule of law
  11. UNESDASoft Drinks Europe welcomes Tim Brett as its new president
  12. Nordic Council of MinistersNordic ministers take the lead in combatting climate change

Join EUobserver

Support quality EU news

Join us