-  Friday 03 July 2020

EU has bouquet and brickbat for Paris

 -  Business Report

(Jan 30 07 Brussels) -  EU finance ministers meeting today are expected to end sanctions on France over its public deficit, but they will urge Paris to make greater efforts to put its financial house in order.

EU diplomats said finance chiefs of the 27-member bloc, who are meeting for regular talks in Brussels, would unanimously agree to stop disciplinary measures against France that were put in place in 2003 after its public deficit broke EU rules the previous year.

"There will be no difficulties in lifting the procedure," said a senior EU diplomat.

France is expected to post a deficit of 2.7 percent of gross domestic product (GDP) for 2006 and 2.6 percent for 2007.

Under EU limits, national governments have to keep their public deficits under the 3 percent of GDP ceiling set by the EU stability pact. France, Germany and others have repeatedly broken that rule.

But while EU ministers will commend France for having reduced its deficit in a "credible and sustainable manner", they are expected to call on Paris to step up efforts to slash its government debt.

The European Commission earlier this month warned that countries such as Germany, France and Italy, which were witnessing an upturn in their finances, should use current economic "good times" to further slash budget deficits in 2008 and beyond.

Business Report

Other articles by reporter Business Report

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