On Thursday 8 September, Economic and Monetary Affairs Commissioner Pierre Moscovici disagreed with figures in France who believe or say they believe that the Stability and Growth Pact (SGP) could be watered down.
The commissioner said there was no question of dismantling it, as far as he was concerned. He pointed out that the 3% of GDP threshold for public deficits was laid down in the European treaties, which will not be amended any time soon.
The commissioner therefore said that the European Commission would ensure that budget commitments are met when it examines the budget plans for 2017 that eurozone members are due to submit by mid-October. He said this would be a further test of credibility. France, where there will be presidential elections in 2017, is the main country concerned, because it has to get rid of its excessive deficit in 2017. Noting real progress in reducing the French public deficit and in the country’s reform agenda, Moscovici said it was imperative for the trend to continue, particularly as one neared the target. He said any new tax cuts have to comply with the commitments made. He was referring here to promises made by the incumbent socialist government. The French authorities should submit budget plans for a decisive public deficit well below 3% of GDP, Moscovici said.
The commissioner says France can reasonably achieve its budget trajectory. He will be holding two-way talks with the French economy and finance minister, Michel Sapin, at the meeting of finance ministers and money chiefs in Bratislava on Friday (see EUROPE 11618).
SGP can be reformed
The commissioner said it would be possible to consider how the Stability and Growth Pact can be simplified, along with making European budget rules more visible and coherent. He said the SGP would continue to be interpreted smartly, referring to decisions not to fine Spain or Portugal for failing to take enough action to respect the SGP from 2013 to 2015. (Original version in French by Mathieu Bion)