Brussels, 25/02/2015 (Agence Europe) - On Wednesday 25 February, the European Commission decided to give France an extra two years, until 2017, to bring its nominal deficit below the threshold of 3% of GDP.
France was “the most complicated case discussed today”, said the Commissioner for the Euro, Valdis Dombrovskis. He said that Paris needs to step up its efforts “on both the fiscal and the reforms sides”. It is for this reason that the Commission has asked the French authorities to make a structural budgetary effort (not including conjunctural effects) of 0.5% of GDP in 2015, although the structural effort calculated by the European institution on the basis of the reforms presented by the French government is just 0.3% of GDP; this represents an adjustment of 0.2%, which is consistent.
Pierre Moscovici, the commissioner for economic and financial affairs, pointed out that in 2013, the Commission gave the country two years to bring its public deficit below 3% of GDP. A deficit of 4.1% has been forecast for France in 2015 and, if the same circumstances continue, it will also be 4.1% in 2016, the Commission states. The macro-economic situation has not substantially improved, Moscovici added. He said that the reforms undertaken in France are a step in the right direction, but “not enough to correct the situation”. A new recommendation must be adopted (this will be done”over the next few days”, Moscovici said), with a trajectory of returning to around 3% by 2017. This will call for considerable efforts on the part of France, the Commissioner said. The French minister, Michel Sapin, has undertaken to comply with this 0.5% effort. This is the conclusion of months of tough but constructive exchanges, Pierre Moscovici stressed.
Public debt. The Commission decided not to open an excessive deficit procedure against Finland over the country's debt. It overshot the debt threshold (60% of GDP) due to its contribution to the bailout fund. For Italy and Belgium, the debt criterion “remains relevant”, the Commission said.
In-depth report into macro-economic imbalances. Five countries (France, Italy, Croatia, Bulgaria and Portugal) have excessive imbalances, which calls for monitoring and drastic measures, Moscovici said. (Translation from the original French version)