Stalled France to miss deficit target until 2017
PARIS (AP) — France has revised down its growth forecasts and says it will miss its deficit target for another three years, confirmation that Europe’s second-largest economy will emerge only slowly from its stagnation.
Finance Minister Michel Sapin said Wednesday the budget deficit would be around 4.3 percent of GDP in 2015 and would not dip under the 3 percent target for European Union countries until 2017, a decade after the last time France hit the target.
He revised down the country’s growth figures yet again to 0.4 percent this year and 1 percent for next year, down from initial projections of 1.7 percent.
France’s economic troubles mirror a broader lack of growth in Europe.
Sapin said “an economic reality that concerns all of us” needed to be taken into consideration, although he said France was not requesting a change in the budget rules. Hollande’s government had earlier negotiated a delay in meeting the target until 2015.
The news was not welcome at EU headquarters in Brussels, since France’s dragging economy is weighing on a Europe-wide recovery.
Simon O’Connor, spokesman for the EU’s economic commissioner, said France must “clearly specify credible measures” to cut spending and rein in its deficit in the coming years. Bold reforms and solid public finances “are essential not only for France but for the euro area as a whole,” he said.
Like other European countries, France is struggling to trim its deficit after years of excessive state spending. Sapin said President Francois Hollande’s Socialist government would push ahead with 21 billion euros ($27 billion) in cuts next year and 50 billion euros ($64 billion) by 2017, the last year of Hollande’s term.
France has company in missing the deficit target: Last year, it was joined by Britain, Greece, Spain and Ireland, among other scofflaws.
Juergen Baetz in Brussels contributed to this report.