Brussels, 26/09/2013 (Agence Europe) - On Thursday 26 September, the European Commission gave France a gold star for its draft budget for 2014, unveiled to the Commission that day by French economy minister Pierre Moscovici.
After a meeting with Moscovici, Euro Commissioner Olli Rehn said he was aware of the huge efforts made by France to restore its public finance and the draft finance law is characterised by responsibility and caution. In mid-November, the Commission will unveil its assessment of member states' draft budgets for 2014 under - for the first time - the new European economic governance rules inscribed in the “two-pack” of budget rules. It will focus on respect by France of the structural adjustment recommendations. Rehn said the Commission's role was to ensure commitments were respected and to prevent slippages rather than correcting any that occur.
Moscovici said French budget implementation was in line with objectives for 2013, but it was true that they had overshot the nominal deficit because of lower-than-expected tax returns, but had respected the structural deficit targets. Talks are continuing with the European Commission in this connection. For 2014, he said France would keep the structural deficit reduction target of 0.9% in order to achieve a structural balance by the end of the French president's current term of office.
The draft budget was unveiled by the French government yesterday, and strikes the right balance between the vital budget consolidation and support for growth and jobs, which is now the EU's priority, explained Moscovici. Broadly, the new budget includes growth targets of 0.1% of GDP in 2013 and 0.9% of GDP in 2014, figures that Rehn said were “plausible,”; a nominal deficit of 4.1% in 2013 (compared with the 3.9% target), falling to 3.6% of GDP in 2014 under the European Summit's recommendations, and then falling to below 3% in 2015; budget savings in 2014 of €18 billion, 80% of it in the form of savings in 2014 and 100% in 2015.
Rehn said that ambitious structural reforms were needed, and Moscovici talked about reform of the labour market, the current reform of pensions based on competitiveness by reducing the cost of labour. On French public debt, which Rehn said would reach the EU average (94% of GDP in 2013 and 96% in 2014), Moscovici said that the structural efforts undertaken would reverse the public debt trajectory from 2015 onwards. (MB/transl.fl)