Saturday

3rd Jun 2023

EU still undecided on France deficit

  • Paris is a credibility test for EU's beefed up economic scrutiny (Photo: Trey Ratcliff)

Fiscal hawks and doves within the EU commission and member states continue to disagree on how to deal with France's budget deficit, seen as a credibility test for the EU.

A meeting of heads of cabinets of EU commissioners over the weekend ended without a clear decision on possible sanctions for Paris for having again missed the three-percent deficit target for next year.

Read and decide

Join EUobserver today

Become an expert on Europe

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

... or subscribe as a group

France has a projected deficit of 4.3 percent of GDP in 2015 and has announced it will meet the deficit target only in 2017.

Handelsblatt reports that a eurozone finance ministers meeting scheduled for next Monday (1 December) to discuss the EU commission's verdicts on the nationals budgets is likely to be postponed.

The EU executive has until Sunday (30 November) to publish its opinions on the 18 eurozone countries' budgets.

French media have also reported that a delay is likely. Le Figaro quoted officials as saying that a decision on France's sanctions could be postponed until March next year, to give the French government more time to put in place some of the announced cuts.

EU commissioners are likely to discuss the issue on Tuesday in Strasbourg.

French finance minister Michel Sapin meanwhile has been touring southern states seeking support for his cause. He visited Madrid and Lisbon at the end of last week, pointing out that Spain was also granted two delays on its deficit targets.

However, Spain and Portugal's spending cuts were much harsher than what France has pledged to do - a salary freeze and more flexible working hours.

And to some - notably German - voices, France's credibility is shaky.

Last week German commissioner Guenther Oettinger said the commission should be tough on "deficit recidivist" France, as a matter of EU credibility and that Paris should table "clear, concrete" reforms.

On Sunday, German finance minister Wolfgang Schaeuble entered the fray, telling Focus magazine that the EU economics commissioner (currently a post held by a Frenchman, Pierre Moscovici) should have a veto right over national budgets.

He said the economics commissioner should have the same powers as the anti-trust commissioner, who can fine states or companies for violating EU competition rules "without any political compromises".

"The parliaments of the respective member states would still decide themselves if they cut spending, increase taxes or adopt growth-enhancing measures," Schaeuble said.

But a veto would "give a strong signal that we jointly really want to stick to our commitments. We need to show how much further we want to go in the direction of a fiscal union. This means, that eurozone countries make binding commitments to decrease their debt," he added.

Debt is the main problem for another big member state, Italy, whose budget deficit is closer to the three-percent target.

The EU commission is expected to clear the Italian budget, but re-examine it in March, Italian media reported on Sunday.

France gets three months to tweak budget

The EU commission on Friday said "political" factors merit giving France more time to work on its budget deficit. It urged Germany to spend more to revive eurozone growth.

EU: national energy price-spike measures should end this year

"If energy prices increase again and support cannot be fully discontinued, targeted policies to support vulnerable households and companies — rather than wide and less effective support policies — will remain crucial," the commission said in its assessment.

Opinion

EU export credits insure decades of fossil-fuel in Mozambique

European governments are phasing out fossil fuels at home, but continuing their financial support for fossil mega-projects abroad. This is despite the EU agreeing last year to decarbonise export credits — insurance on risky non-EU projects provided with public money.

Latest News

  1. Spanish PM to delay EU presidency speech due to snap election
  2. EU data protection chief launches Frontex investigation
  3. Madrid steps up bid to host EU anti-money laundering hub
  4. How EU leaders should deal with Chinese government repression
  5. MEPs pile on pressure for EU to delay Hungary's presidency
  6. IEA: World 'comfortably' on track for renewables target
  7. Europe's TV union wooing Lavrov for splashy interview
  8. ECB: eurozone home prices could see 'disorderly' fall

Stakeholders' Highlights

  1. International Sustainable Finance CentreJoin CEE Sustainable Finance Summit, 15 – 19 May 2023, high-level event for finance & business
  2. ICLEISeven actionable measures to make food procurement in Europe more sustainable
  3. World BankWorld Bank Report Highlights Role of Human Development for a Successful Green Transition in Europe
  4. Nordic Council of MinistersNordic summit to step up the fight against food loss and waste
  5. Nordic Council of MinistersThink-tank: Strengthen co-operation around tech giants’ influence in the Nordics
  6. EFBWWEFBWW calls for the EC to stop exploitation in subcontracting chains

Stakeholders' Highlights

  1. InformaConnecting Expert Industry-Leaders, Top Suppliers, and Inquiring Buyers all in one space - visit Battery Show Europe.
  2. EFBWWEFBWW and FIEC do not agree to any exemptions to mandatory prior notifications in construction
  3. Nordic Council of MinistersNordic and Baltic ways to prevent gender-based violence
  4. Nordic Council of MinistersCSW67: Economic gender equality now! Nordic ways to close the pension gap
  5. Nordic Council of MinistersCSW67: Pushing back the push-back - Nordic solutions to online gender-based violence
  6. Nordic Council of MinistersCSW67: The Nordics are ready to push for gender equality

Join EUobserver

Support quality EU news

Join us