Brussels, 06/06/2016 (Agence Europe) - France will keep its commitments to reduce its public deficit in nominal terms in 2016 and 2017, according to finance minister Michel Sapin.
“This year and next, there is no question that we will deviate from our aims to bring down the public deficit. I wish to be very clear on this point: France's deficit will be considerably below 3% in 2017”, Sapin told the newspaper Les Échos, in an interview published on Monday 6 June (our translation throughout). He put at “€4 billion” new expenditure for 2016 promised by the French President François Hollande, with the 2017 presidential election campaign starting to take shape. In order to pay for this spending, he listed the mobilisation of the precautionary reserve in which €11 billion in credit have been frozen, as well as contributions from social security and the local authorities. The minister added that it was “legitimate” that French households should benefit from the improved economic situation.
In the first quarter of 2016, the wealth produced in France grew by +0.5%. The Commission forecasts growth in France of 1.3% of national GDP in 2016 (see EUROPE 11545).
Last week, the President of the European Commission Jean-Claude Juncker, triggered a row when he admitted that the extra time given to Paris to bring down its deficit had been decided upon “because it is France”. The President of the Eurogroup, Jeroen Dijsselbloem, criticised the Commission for losing credibility by not treating the member states equally. Since then, the Commissioner for Economic and Financial Affairs, Pierre Moscovici, has taken steps to rectify the situation, by warning that the Commission would show France no further leniency in the event of any deviation from its objective. (Original version in French by Mathieu Bion)