Brussels, 26/09/2002 (Agence Europe) - On Thursday, Commissioner Pedro Solbes described himself as being, "worried by the budgetary targets" of the French government whose budget for 2003 demonstrated that it had chosen to postpone "its fiscal consolidation process". Mr Solbes particularly regrets, "the lack of clear improvement in the cyclically adjusted budgetary position in 2003" and then the fact that, "a balanced budget position will not be reached by 2006". Another cause for concern was the decision of the French government to stabilise next years' public spending at the 2002 level, namely 2.6% of GDP, which "remains dangerously close to the 3% of GDP threshold established by the Stability and Growth Pact". While explaining that the Commission would not give its definitive opinion until after the complete and far-reaching assessment of the figures, Mr Solbes did provide a "preliminary commentary" that was very critical of the French government, "I particularly regret the lack of clear improvement in the cyclically adjusted budget deficit position in 2003" and added that, "This appears not to be in line with previous commitments of the French government".
Mr Solbes' reaction is both surprising and audacious given the Commission's habit of refraining from heated comments on Member States' draft budgets. After having proposed on Tuesday that Euro-zone Member States commit themselves to reducing their structural deficits by 0.5% annually in return for the postponement to 2006 of the deadline for budgetary balance, Mr Solbes is demonstrating his complete determination to work towards strengthening the co-ordination method in Euro-zone budgetary policies. The Commissioner concluded that the, "Stability and Growth pact is the appropriate framework to do that and I am confident that each actor will play its role in the system".
According to the draft law on finances, the French government hopes to find a situation close to budgetary balance (-0.5%) by 2006 but on the condition that growth is 3% each year between 2004-2006. If annual growth only reaches 2.5%, the deficit will be brought down to 1% in 2006, explained the French Minister for the Economy.