* Deficit delay "hugely detrimental" for credibility
* Target numbers important for foreign investors, public
* Public support key for reforms
By Martin Santa and Eva Kuehnen
BRATISLAVA, Feb 20 France's European partners
raised alarm on Wednesday about the possibility of giving Paris
more time to meet the European Union's public deficit target.
Officials from Slovakia, Austria, and Finland said such a
step could harm credibility at home and with international
France has acknowledged that it will miss its 2013 growth
target as well the European Union's 3 percent of gross domestic
product deficit goal this year, adding to concerns that the euro
zone's second-largest economy after Germany is on the brink of
And even though France is not worried about its fiscal
credibility if exceptional circumstances require it to push back
its public deficit target, its European partners are.
"It would be hugely detrimental for our (EU) credibility,"
Harald Waiglein, director general at Austria's finance ministry
told a conference in Bratislava about the future of Europe.
"France could be a bit more ambitious."
"We risk giving off the impression that we are lax."
Slovakia's Finance Minister Peter Kazimir also thought
giving France more time was "not a good idea".
"Germany and France are the godfathers of Europe," Kazimir
said, speaking at the same event, referring to the countries'
decisive role in driving European integration after World War
Two to secure peace.
"The nominal deficit targets are very important, especially
for foreign investors. We notice this when we go on these road
shows to Japan and elsewhere. This is mainly about psychology.
And we are still experiencing times that are extra-ordinarily
delicate for countries like Slovakia."
FACTS VERSUS FIGURES
The European Union's top economic official, Olli Rehn, last
week opened the door to giving countries more time to cut their
deficits as long as they could demonstrate that their underlying
deficit-cutting measures were serious.
The EU Commission last year granted some leeway to Spain.
While nominal headline figures are crucial for the public to
gauge a country's reform progress, the more complex structural
view gives experts a better idea about a country's health.
"Both measures are pretty important," said Spain's Treasury
Secretary General Inigo Fernandez de Mesa. "At the end of the
day, what we should aim at is a reduction in the nominal
deficit, which is the one that is going to reduce the level of
debt and ... what markets are looking at."
Spain had made a huge effort in structural terms last year,
he said, which "had a very important impact in nominal terms,
being close to the deficit what we have agreed in Europe".
But without public support, reforms may fail.
"There has to be this national ownership, otherwise we are
lost," Martti Hetemaki, under-secretary of state at the Finnish
"If the rules that have been commonly agreed are not
implemented then there is a question about the credibility of
institutions and what is commonly being done. We would have a
big problem then in terms of ownership of policies," he said.
Tens of thousands took to the streets of Athens on Wednesday
during a nationwide strike against wage cuts and high taxes that
kept ferries stuck in ports, schools shut and hospitals with
only emergency staff.
"There is no question that structural reforms deliver in the
longer term, but how long is longer term?" asked Panos
Tsakloglou, chairman of the council of economic advisers to the
Greek finance ministry in a panel discussion in Bratislava.
"If there are no growth prospects down the road this can
become a problem," Tsakloglou said.
(Reporting by Martin Santa. Editing by Jeremy Gaunt.)