Saturday

18th Nov 2017

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.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

"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.

MEPs ponder how to fight tax havens

After the Paradise Papers brought new revelations about tax dodging across the globe, including in the EU, the European Parliament wonders how to step up the fight.

EU commission wants 'credible' tax haven blacklist

The EU's finance commissioner Pierre Moscovici told reporters that he wants a credible EU blacklist of tax havens following the latest media tax avoidance revelations of the wealthy elite in the Paradise Papers.

MEPs ponder how to fight tax havens

After the Paradise Papers brought new revelations about tax dodging across the globe, including in the EU, the European Parliament wonders how to step up the fight.

News in Brief

  1. Bonn climate talks extend into Friday evening
  2. UK needs to move on Brexit by early December, Tusk says
  3. Puigdemont extradition decision postponed to December
  4. Ireland wants written UK guarantees to avoid hard border
  5. US did not obstruct climate talks, says German minister
  6. EU signs social declaration
  7. Puigdemont to be heard by Belgian judges
  8. Steep fall in migrants reaching EU

Stakeholders' Highlights

  1. European Jewish CongressAntisemitism in Europe Today: Is It Still a Threat to Free and Open Society?
  2. Counter BalanceNew Report: Juncker Plan Backs Billions in Fossil Fuels and Carbon-Heavy Infrastructure
  3. Nordic Council of MinistersNordic countries prioritise fossil fuel subsidy reform
  4. Mission of China to the EUNew era for China brings new opportunities to all
  5. ACCASmall and Medium Sized Practices Must 'Offer the Whole Package'
  6. UNICEFAhead of the African Union - EU Summit, Survey Highlights Impact of Conflict on Education
  7. Nordic Council of MinistersNordic Council Calls for Closer Co-Operation on Foreign Policy
  8. Swedish EnterprisesTrilogue Negotiations - Striking the Balance Between Transparency and Efficiency
  9. Access EuropeProspects for US-EU Relations Under the Trump Administration - 28 November 2017
  10. World Vision20 November: Exchange of Views at the EP on Children Affected by the Syria Crisis
  11. Nordic Council of MinistersSustainable Growth the Nordic Way: Climate Solutions for a Sustainable Future
  12. EU2017EEHow Data Fuels Estonia's Economy

Latest News

  1. EU keeps former Soviet states at arm's length
  2. EU leaders make pledge on social issues after populist backlash
  3. EU agencies and eastern neighbours This WEEK
  4. Germany slams Dutch call for more ambitious EU climate goal
  5. Mind the gap: inequality in our cities
  6. Climate activists 'disappointed' with EU at climate talks
  7. Davis outlines UK vision on Brexit in Berlin
  8. German coalition talks in near collapse