Reuters logo
UPDATE 1-France says will meet its deficit target in 2014
March 4, 2013 / 8:26 PM / 5 years ago

UPDATE 1-France says will meet its deficit target in 2014

By Robin Emmott

BRUSSELS, March 4 (Reuters) - France, the euro zone’s second-largest economy, will miss its budget deficit target this year but can reach the goal in 2014, the country’s Finance Minister Pierre Moscovici said on Monday.

Under pressure to show budgetary discipline to the rest of the euro zone and reassure financial markets, Moscovici pleaded for understanding from the European Commission, the EU executive that is policing countries’ debts and deficits.

“We need to be intelligent and find a balance between fiscal consolidation and growth... France can bring its budget deficit to below 3 percent in 2014,” Moscovici told a news conference after a meeting with his euro zone counterparts in Brussels.

“We will not meet our deficit forecast for 2013 and I don’t want to deepen austerity at a time of recession and stagnation,” Moscovici said, referring the euro zone’s economy, which the Commission expects to shrink 0.3 percent this year.

“We don’t have any more adjustment plans for 2013,” he said of France.

France is expected to show almost no growth this year -- a 0.1 percent expansion -- the Commission said in its latest forecast last month.

Partly because of the lack of growth, the Commission has forecast that France’s deficit will be 3.7 percent of gross domestic product (GDP) this year, well short of the 3 percent target under European rules.

Economists doubt the wisdom of severely restricting government spending at a time of recession and Italian voters rejected the austerity policies of outgoing Prime Minister Mario Monti in a vote last month, the latest popular protests sweeping the euro zone.

But France also knows it must set an example as one of the leading economies in Europe, Moscovici said.

“We will show how serious we are in our structural reforms and our structural deficit,” Moscovici said, referring to the budget shortfall that strips out the effects of the business cycle on government revenue and expenditure, as well as one-off items. “We will not fall into lax policies,” he said.

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below