Brussels, 21/04/2015 (Agence Europe) - On Tuesday 21 April, the French finance minister, Michel Sapin, presented the Commissioner for Economic and Financial Affairs, Pierre Moscovici, with the outlines of the national stability and reform programmes France will submit to the European Commission by the end of April.
The purpose of this meeting was to ensure that the latest budgetary data and estimates of the impact of the reforms in France can be fed into the spring economic forecasts the European institution is to publish on Tuesday 5 May.
Economic recovery, which has allowed France to achieve a better public deficit in 2014 than anticipated (4.0% of GDP), has obliged the Commission, which initially forecast French deficit of 4.3% of GDP, to revise the basis for its analysis. “This is a radical change for the Commission itself. It creates a climate of goodwill”, a source close to the dossier told us.
As France will be sticking to the letter of what the European level expects of it for 2015, the debate will focus on the additional structural effort (not including conjunctural effect) required in 2016 and 2017 (see EUROPE 11296). Paris forecasts a “classical” stuctural budgetary effort (0.5% of GDP in 2016 and 2017) in the framework of its €50 billion programme of savings over the period 2015-2017, to include €21 billion in 2015, whilst the Ecofin Council has recommended greater effort (0.8% of GDP in 2016 and 0.9% in 2017).
By way of justification for this difference, France is now laying emphasis on sticking to the rules in nominal terms. “When you are over 3% of GDP in deficit, the rule is the nominal deficit. You get into the structural deficit when you fail to respect the nominal deficit. If you do respect the nominal, the structural has its purpose, but it doesn't have the legal interest it can have when you're not respecting the nominal”, the same source said. (Mathieu Bion)