EU gives France two-year extension for deficit reduction
France must bring its deficit down to the 3 percent of GDP required by 1992 Maastricht Treaty

European Union finance ministers announced late Tuesday that France would have an extra two years to bring its budget deficit below the 3 percent of GDP mandated by the 1992 Maastricht Treaty.

France's budget deficit is expected to be 4.1 percent of GDP this year.

The group of ministers said in a statement that the extension was justified by the efforts made by the French government since 2013, and by the current weak economic conditions.

However, the extension will be subject to close supervision. "France needs to step up its efforts," said Valdis Dombrovskis, the commission’s vice-president in charge of eurozone policy.

"We are putting France under very tight deadlines, so we will be coming back to assess both its fiscal and macroeconomic performance in the next two, three months," he added.

There have been complaints from other EU member states about the special treatment for France.

"I am saying if you're giving discretion to six or seven European countries, including France, we want discretion as well, but our discretion is in the application of the rules," Irish Finance Minister Michael Noonan told reporters in Brussels on Monday.

"The point is to give me budgetary space to make decisions for the 2016 budget that I’ll be introducing in October. Whether I use the space or not is not the issue -- it’s simply to give me the space so that I’m not inhibited by European rules to spend money that I think is necessary," Noonan added.

The French government is committed to coming forward with a plan for €4 billion ($4.3 billion) in savings by April, with more detailed plans to reform the economy due in May.

Last Modified: 2015-03-11 09:12:51
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