Brussels, 13/02/2013 (Agence Europe) - The French government is preparing people for the fact that France may not meet its deficit reduction target of 3% of GDP in 2013 because the country's growth is expected to be lower than the 0.8% forecast.
French Foreign Minister Laurent Fabius said on French television (Canal +) on Wednesday that it was unlikely that the target would be met, while, on a different channel, Economy Minister Pierre Moscovici said that the timing had not changed, but it was unlikely that the targets would be met. Moscovici said that a combination of austerity and recession was not the right solution for Europe or for France, but the French government had made huge efforts to cut the deficit which, he said, was a structural deficit of 1.2% of GDP in 2012 and 2.1% in 2013. On Tuesday, following a report by the French Court of Auditors stating that the budget target was unlikely to be met, the French president, François Hollande, said that there was no point having targets that couldn't be met.
The European Commission is refusing to comment at this stage, with a spokesperson for Euro Commissioner Olli Rehn saying that the Commission's departments were working on the winter economic forecasts (to be published on 22 February), at which point there would be more visibility about French finances. The spokesperson said the Commission had always had the same approach to budget matters, analysing each country using the same criteria and focussing on structural adjustment while taking account of the macroeconomic situation rather than simply looking at targets as such, while not ignoring the targets' importance.
Alongside the Commission's publication of its winter forecasts, the member states are preparing their stability programmes to be submitted to the Commission in April at the same time as their economic reform programme (under the European Semester). Beforehand, the French government will unveil its programme to the country's parliament in mid-March. Moscovici said the French government would begin talks with the European Commission, adding on Monday after the Eurogroup meeting that France's report was already complete. He said he hadn't used the strong euro argument to revise French growth forecasts (see EUROPE 10784). (MB/transl.fl)