Brussels, 20/10/2003 (Agence Europe) - On Tuesday in Strasbourg, the European Commission is expected to adopt a new recommendation to give France formal notice that it should reduce its structural deficit (outside the uncertainties of the economic situation) by one point of GDP in 2004 and 0.5% in 2005 in order to guarantee that the public deficit will fall below the 3% GDP mark in 2005. The Commission could thus show proof of its understanding by accepting to postpone by one year the deadline initially set for 2004 in the Ecofin Council's recommendation of June. The Commission is also expected to consider that the growth forecast chosen by France is realistic (1.7% of GDP next year). In its draft law on finance for 2004, France foresees reducing structural deficit by 0.7% of GDP, and should therefore make an additional effort.
Calling on France to bring its public debt of 4% in 2003 down to below 3% in 2004 would be calling for a tough effort difficult to justify from the economic point of view, Commissioner Pedro Solbes admitted recently. Two weeks ago, the Commission noted that France has not taken any action that has had an effect after the recommendations made to it in June by the Ecofin Council, mainly that of bringing its public deficit down below 3% of GDP in 2004 (EUROPE of 9 October 2003, p.6). Paris is tabling on a public deficit of 3.6% in 2004, that is higher than 3% GDP for the third year running. The Commission's recommendations will be discussed on 4 November by the Economy and Finance Ministers. France will then have two months until end December in which to explain how it plans to implement these recommendations, if it does not wish to have sanctions imposed upon it.