PARIS: The EU gave France until 2017 to bring its budget deficit back into line with Brussels’ rules, meaning the eurozone’s second-biggest economy will avoid a fine for now.
The European Commission said, however, that France must present it with a reform plan on how it intends to get its finances back in order by April.
“Today we have decided to propose a new recommendation to France as to how to address its excessive deficit, and set a new deadline for it to be below 3.0 percent, this being by 2017,” the bloc’s euro commissioner, Valdis Dombrovskis, told a hastily-arranged press conference.
But, he said, “It’s clear that France needs to step up its efforts.”
Theoretically, eurozone countries face penalties if their deficit stays above 3.0 percent of economic output but any fine levied on one of the EU’s founding members such as France would have been unprecedented.
In November, the EU gave France an extra three months to come up with a plan to cut its deficit to below the 3.0 percent of GDP limit.
France, the eurozone’s biggest economy after Germany, had already won two previous extensions, first under the presidency of Nicolas Sarkozy and then under current President François Hollande.
Upon learning the news, French Prime Minister Manuel Valls said France’s intention is “indeed to be under the 3 percent” threshold in 2017, noting that thanks to new reforms, France “is in the midst of changing”.
