26th Feb 2024

Eurozone ministers ask Paris to cut deficit as promised

  • Mr Barroso said EU countries should take action rather than send pessimistic messages on economy (Photo: EUobserver)

Ministers from eurozone countries have asked France to keep committed to an original deadline of 2010 for balancing its budgetary deficit, but indicated they would take into account the country's growth records in later evaluation.

Despite French pressure to avoid any reference to the deficit timetable adopted by member states of Europe's monetary union last April in Berlin, finance ministers of the 15-strong group agreed on Monday (11 February) to demand Paris achieve it.

Read and decide

Join EUobserver today

Get the EU news that really matters

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

... or subscribe as a group

"France needs to reinforce its budgetary consolidation efforts... through a rigorous application of its budget for 2008... to be on target for its MTO's [Medium Term Objective] in 2010 as cyclical conditions allow," Luxembourg prime minister and eurogroup chief Jean-Claude Juncker told reporters following the Brussels meeting.

It was mainly due to forecasts of economic slow-down that Paris insisted it needs to revise the earlier budgetary commitments and balance its books only by 2012.

"We are making every effort possible to reach balance in 2010, but in the current situation, there's no point telling stories, it will be very difficult," French finance minister Christine Lagarde was quoted as saying by French daily of Le Monde.

But some large EU countries did not accept such an explanation. "The French already asked for that even before there was a downturn so I don't think that's the real argument," commented the Dutch finance minister Wouter Bos.

German finance chief Peer Steinbruck also pointed out that the rules underpinning the euro would lose credibility if not respected, saying: "in particular, the large member states should bind themselves to the commitment to reach their medium-term objectives, by at the latest, 2010."

However, while confirming the original deadline, the eurogroup ministers also admitted the cyclical movements of global and national economies would be taken into account in future assessments of countries' performances.

"When the time comes, we shall have to asses the situation if France does not achieve its result. We will have to asses whether France should have been able to achieve its MTO's given the cyclical conditions," said Mr Juncker.

"So we may have to come back to this issue for France and for other Member States too, when the time comes. The eurogroup just want to ensure that the Berlin decision is complied with," he added.

No recession in Europe

Meanwhile, European Commission president Jose Manuel Barroso made an extraordinary appearance at the eurozone meeting for a debate on the general economic trends, following recent turbulences on global financial markets.

"We have no rational reason to fear recession," Mr Barroso said in a statement prior to the ministerial session, amid worries of worsening performance of US economy which could have a negative impact also on Europe's economy.

He argued the EU member states should take action rather than sending pessimistic messages. "If we talk down other sectors of the economy, or if we hasten into knee-jerk measures, we will end up undermining the strong fundamentals on which our measured confidence is based," the commission president insisted.

But his colleague in the 27-strong college, economy commissioner Joaquin Almunia, did express clearly the worries over rising inflation which accelerated in the monetary union to 3.2 percent in January - a 14-year high.

"We expect the raise of inflation to be temporary but we are extremely concerned by this. We need to stay alert and remain vigilant so that inflation does not become a trend in expectations of economic agents," said Mr Almunia.

EU's €723bn Covid recovery fund saw growth, but doubts remain

The €723bn Covid-19 recovery fund, launched three years ago, has been a success, according to a mid-term internal review — but less effective than initially predicted. And according to one NGO, the commission painted an "overly positive picture".

France's Le Maire 'goes German' with austerity budget

The French government announced €10bn in further spending cuts. However, defence spending is set to increase significantly, up to €413bn from €295bn, while €400m was cut from a fund meant for renovating schools, carpooling infrastructure, and other environmental projects.

Online platforms must be liable for payment scams, say MEPs

MEPs have agreed on new rules to level the playing field between banks and non-banks, and to make payments more user-friendly, cheaper and safer — including measures to make online platforms liable for payment fraud that occurs through their services.


After two years of war, time to hit Putin's LNG exports

Two years of tragedies, with well over 100,000 Russian war crimes now registered, underscore the urgent need to stop international LNG investments in Russia that continue to fund Vladimir Putin's war chest.


Blackmailing the Global South on EU carbon border tax won't work

According to the European Commission, CBAM is supposed to prevent "carbon leakage". In other words, it seeks to prevent European industries relocating to jurisdictions with less stringent environmental policies, while also incentivising carbon pricing and industrial decarbonisation abroad.

Latest News

  1. More farmers, Ukraine aid, Yulia Navalnaya in focus This WEEK
  2. EU rewards Tusk's Poland on rule of law with €137bn
  3. UK-EU relations defrosting ahead of near-certain Labour win
  4. EU paid Russia €420-per-capita for fossil fuels since war began
  5. After two years of war, time to hit Putin's LNG exports
  6. Creating the conditions for just peace in Ukraine
  7. Energy and minerals disputes overshadow new EU-ACP pact
  8. Germany speeds up Georgia and Morocco asylum returns

Stakeholders' Highlights

  1. Nordic Council of MinistersJoin the Nordic Food Systems Takeover at COP28
  2. Nordic Council of MinistersHow women and men are affected differently by climate policy
  3. Nordic Council of MinistersArtist Jessie Kleemann at Nordic pavilion during UN climate summit COP28
  4. Nordic Council of MinistersCOP28: Gathering Nordic and global experts to put food and health on the agenda
  5. Friedrich Naumann FoundationPoems of Liberty – Call for Submission “Human Rights in Inhume War”: 250€ honorary fee for selected poems
  6. World BankWorld Bank report: How to create a future where the rewards of technology benefit all levels of society?

Stakeholders' Highlights

  1. Georgia Ministry of Foreign AffairsThis autumn Europalia arts festival is all about GEORGIA!
  2. UNOPSFostering health system resilience in fragile and conflict-affected countries
  3. European Citizen's InitiativeThe European Commission launches the ‘ImagineEU’ competition for secondary school students in the EU.
  4. Nordic Council of MinistersThe Nordic Region is stepping up its efforts to reduce food waste
  5. UNOPSUNOPS begins works under EU-funded project to repair schools in Ukraine
  6. Georgia Ministry of Foreign AffairsGeorgia effectively prevents sanctions evasion against Russia – confirm EU, UK, USA

Join EUobserver

EU news that matters

Join us