Brussels judge still insufficient budgetary efforts of France – L’Observateur

Brussels judge still insufficient budgetary efforts of France – L'Observateur

Brussels (AFP) – France has yet to make efforts to reduce its budget deficit because the account is not there, according to the European Commission, while Paris will be able to count this year on a slight economic upturn.

The EU executive’s verdict will be on February 27 on the budget of France which, like Italy and Belgium, got a time to improve its public finances, on pain of sanctions.

But the Commission now believes the effort to reduce the French deficit for 2015 only 0.3% of GDP in structural terms, ie “in significantly short of the minimum effort ‘requested by Brussels, which is 0.5% on Thursday warned the European Commissioner for Economic Affairs, Pierre Moscovici.

This means that “additional measures will be needed to fill this gap,” said one who was until Last year the finance minister of the French government. There is “an effort to provide,” he urged, because it is “around it and structural reforms that have yet to learn and develop in time we will continue to talk” with the French authorities.

French source, it always appears confident about the ability to Paris to meet the target of 0.5%.

Mr. Moscovici noted “good news for the French economy” with a “growth is recovering.” According to forecasts released Thursday by the Commission, French growth is expected to reach 1% in 2015, an anticipation revised up from its previous estimate (0.7%) made in November.

new forecast is now in line with that of Bercy. The Commission has also revised upwards its growth forecast for 2016 to 1.8% against 1.5% previously. In both years, French growth will be based on one of its traditional levers: household consumption

– impact of reforms –

It will be supported by “a dynamic evolution. wages, low inflation, reduced energy costs and the recent tax cuts for low-income households, “explains the Commission.

The investments should also contribute to the acceleration of growth, especially from 2016, supported by the tax credit for Competitiveness and Employment (CICE), which benefits businesses.

In contrast, France should not take advantage of the decline of the euro in terms of exports and its external deficit, after a brief improvement is expected to continue to decline from 2016. “The impact of this growth can be further deepened” and “structural reforms” insisted M . Moscovici.

With this improved economic environment and the impact of reforms adopted by the French Government, the Commission now foresees a deficit of 4.1% this year, as the government against 4.5% in its autumn forecast. But their expectations diverge 2016: Commission expected to remain unchanged at 4.1% in economic policy, while Paris expects 3.6%

The French government initially had. promised to return to below 3% in 2015, before pushing the deadline to 2017. Paris is committed to achieve 50 billion euros in savings on public spending between 2015 and 2017.