Thursday

23rd Jan 2020

France pressured on EU deficit targets

EU finance ministers meeting in Luxembourg on Tuesday (5 June) urged France to stick to its EU deficit reduction targets amid concerns about the implications of president Nicolas Sarkozy's tax-cutting plans.

The head of the 13-nation euro group, Jean-Claude Juncker, reminded France of its obligations under the rules governing the euro.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or join as a group

"France clearly must conform to the growth and stability pact, all its good and bad ideas have to fit with the rules of the pact," he said according to French daily Liberation.

Mr Juncker's warning is in response to plans announced by Mr Sarkozy last month to give the country a "fiscal shock" by undertaking a series of tax-cutting measures likely to cost up to €20 billion.

The proposed measures include almost entirely scrapping inheritance tax and cutting tax on overtime.

The announcement came at a time where France's projected deficit for this year is 2.4 percent.

This is under the red line set by the EU where deficits have to kept below 3 percent of GDP but not far enough under for France to be complacent, believe officials.

On top of this, France has promised to reduce its structural deficit by 0.5 percent per year - this was a part of the 2004 reform of the stability pact which said that during periods of growth, eurozone countries should reduce their structural deficit.

Paris, along with all other member states, has also agreed to balance its budget by 2010.

If Paris goes off track it would send a poor message to other member states and would reinforce the belief that big countries can bend the rules as they wish.

For the moment, however, finance ministers are waiting for France's parliamentary elections before giving their final verdict on the Sarkozy plan.

"We must await the installation of the new French government, which means waiting for the end of the day on 17 June and I don't doubt for one moment that France will be able to satisfy the requirements of the stability pact, but we'll have more details in July," said Mr Juncker, according to euronews.

French finance minister Jean-Louis Borloo - attending an EU finance ministers meeting for the first time - countered the worries.

"We want the confidence shock in France to also be a confidence shock for our partners.''

The same meeting also saw ministers unanimously agree that Malta and Cyprus can adopt the euro at the beginning of next year.

Feature

Promises and doubts: Africa's free-trade adventure

The EU is hoping that a continent-wide free trade agreement in Africa will help lift millions out of poverty and help solve issues of security and migration. But its message of values and equal partnership do not resonate with everyone.

Interview

EU Africa envoy: Europe needs to look beyond migration

Europe's obsession with migration from Africa means it risks losing out the continent's potential when it comes to trade, says the EU's ambassador to the African Union, Ranier Sabatucci. "Africa is a growing continent, it is the future," he says.

EU agrees 2020 budget deal

EU governments and the parliament agreed in marathon talks ino next year's budget - which will boost spending on climate, border protection, and the European satellite system. It will also be a benchmark if there is no long-term budget deal.

EU and China agree to defend 'gastronomic jewels'

Manchego cheese, Panjin rice and Polish vodka will all be protected under a new EU-China agreeement. But the two trading giants continue to struggle over other trade-related deals.

News in Brief

  1. UK watchdog unveils online child-privacy standards
  2. Alleged 'bully' nominated for EESC presidency
  3. Greens/EFA fail to agree on accepting Catalan MEPs
  4. MEPs approve over 55 gas projects for EU funding
  5. Italy deputy PM Di Maio quits as Five Star party leader
  6. EU investment bank to keep pressure on Turkey over gas
  7. 'Rare' migrant boat from Belgium to UK sinks
  8. First annual rule of law report expected this year, Reynders said

Feature

Promises and doubts: Africa's free-trade adventure

The EU is hoping that a continent-wide free trade agreement in Africa will help lift millions out of poverty and help solve issues of security and migration. But its message of values and equal partnership do not resonate with everyone.

Opinion

Why von der Leyen must put rights at core of business

Ursula von der Leyen's in-tray must include those European executives on trial for systematic workplace harassment, the break-up of European slavery rings, and allegations of European companies' abuse in palm oil, including child labour, land grabs, and deforestation.

Stakeholders' Highlights

  1. Nordic Council of Ministers40 years of experience have proven its point: Sustainable financing actually works
  2. Nordic Council of MinistersNordic and Baltic ministers paving the way for 5G in the region
  3. Nordic Council of MinistersEarmarked paternity leave – an effective way to change norms
  4. Nordic Council of MinistersNordic Climate Action Weeks in December
  5. UNESDAUNESDA welcomes Nicholas Hodac as new Director General
  6. Nordic Council of MinistersBrussels welcomes Nordic culture

Latest News

  1. EU warned on 'vigilance' after Davos spy fail
  2. What's Libya's impact on EU foreign policy?
  3. EU commission 'lacks ambition' on future conference
  4. Will US privacy-lite hollow out GDPR?
  5. Senior Polish member at EU body faces Belgian abuse probe
  6. Why isn't Germany helping gay rights in Hungary, Poland?
  7. US retiree, scammed by former EU official, awaits justice
  8. Vienna-Brussels night train returns amid EU green talk

Join EUobserver

Support quality EU news

Join us