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Brussels confirmed and signed. In winter its economic forecasts, published Thursday, February 4, the European Commission confirmed that it had already pointed in its autumn forecast in November 2015. France, with unchanged policies, will not hold its reduction target government deficit below the 3% threshold of its gross domestic product (GDP) in 2017. According to Brussels, it will still be 3.4% of GDP in 2016 and above 3.2% in 2017, while Bercy aims a deficit of 3.3% this year and less than 3% in 2017.
Meanwhile, the European Commissioner for economic Affairs, Pierre Moscovici says that “with the will policy and appropriate measures France can meet its commitment of a public deficit below 3% of GDP in 2017 “.
in early 2015, France has yet committed to return “in the nails” of the stability and growth Pact in 2017. at the time, she had passed on the verge of a penalty for not having not kept its deficit-reduction commitments made two years earlier. But Paris had finally received three years of additional respite (until 2017, therefore), which then was interpreted by many Member States (Netherlands, Denmark, Baltic countries) as a treatment.
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Brussels said it had carried out its winter projections “constant policy “ but by integrating the additional requirements of security and defense decided following the attacks of 13 November, which should weigh only 0.05% of GDP. The Commission has, however, not taken into account by “lack of sufficiently precise data,” , the new “plan employment” announced by François Hollande in January 2016. The bill should be 2 billion, announced Bercy, and will be “fully offset by savings elsewhere,” has promised the Finance Minister Michel Sapin.
in addition, given that it seems difficult to launch a major project of structural reforms so close to the election date of 2017, the European Commission hopes that Paris will decide to continue to reduce structural way, the expenses of the french State. A crucial step will be consideration of the draft 2017 budget by Brussels, which will begin next fall. “If the country meets its objectives, budget 2017 will be reasonably brave, and not a pre-election budget,” prevents a diplomatic source.
European officials also revised very slightly lower growth forecasts hexagonal. The French GDP is expected to grow by only 1.3% in 2016 (against 1.4% initially planned for November 2015). The projection for 2017 remains, however, at 1.7%.
poor health bulletin
Bercy still expects a 1.5% growth for this year. Public debt is expected to continue to swell, to 97.1% of GDP in 2017. And unemployment will remain at very high levels: 10.5% of the labor force this year and the beginning of inflection, yet to 10.3% in 2017, if the Brussels calculations are correct (the “employment plan” is not there either, not included).
poor health bulletin, therefore, to the second largest economy of the euro area, although the economic impact of the attacks November on growth and confidence for 2016 should remain low. According to the Commission, “investment should resume [in France] gradually, while net exports continue to have a negative impact on growth” .
More generally, Brussels did not hide his caution or concern on Thursday face the clouds gathering on global growth, and threaten the weak European growth. The Commission has slightly revised down the growth of euro area GDP, which is expected to grow 1.7% in 2016 (against 1.8% expected in November), and 1.9% in 2017. Growth for throughout the Union will remain stable at 1.9% in 2016 and 2% in 2017 (against 2% and 2.1% expected in November). The gap persists with the United States, whose GDP is expected to grow by 2.7% in 2016 and 2.6% in 2017.
The German Motor
“It now appears that factors favorable to growth, such as low fuel prices, low cost of credit and the decline of the euro against the dollar should be more intense and last longer that ‘originally planned. But at the same time, the risks on the economies increased: the slowdown in Chinese growth, international trade, political and geopolitical uncertainty grows, “ reports the Commission
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in this context, the differences between the economies of European countries are still pronounced. Particularly within the euro area. Germany is undoubtedly the engine of the whole, with solid growth (1.8% anticipated for 2016 and 2017), unemployment at just 4.9% of the working population in 2016 (5.2% in 2017 ). And a large influx of migrants (1.1 million in 2015) resulting in public spending for reception and integration, “should contribute to growth in the time horizon of our forecast,” provides the Commission, without however advancing on a cipher of the “refugee crisis” in Germany.
at the other end of the spectrum, there is Greece, in the program austerity imposed by its international creditors, whose GDP will continue to decline, but less than feared (- 0.7% in 2016). But there are also Ireland, whose economy is expected to continue to rebound strongly (+ 4.5% growth in 2016), and Spain, whose growth is confirmed (+ 2.8% in 2016).
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