2nd Jul 2015 12:20
BRUSSELS (Alliance News) - France is on track to meet its EU deficit targets for this and next year, the European Commission announced Thursday after assessing the country's savings plans, while warning that more efforts will be needed to make these achievements durable.
France has been in the spotlight for failing to bring its deficit down to the EU's limit of 3% of gross domestic product. In March, the country was given an additional two years, until 2017, to meet the target.
Paris later unveiled plans to make 9 billion euros (9.9 billion dollars) in savings by the end of 2016.
The proposed measures will lead to a deficit of 3.8% of GDP in 2015 and 3.4% in 2016, the commission said, keeping France below this year's 4% target and on track with next year's goal of 3.4%.
No action will be taken against France at this stage, the EU's executive said. Countries can ultimately be fined for being in breach of EU debt and deficit targets, although the bloc has never taken this step against a eurozone budget sinner.
But the commission warned that Paris is relying "primarily on the improving cyclical conditions and a continuation of the low-interest environment," and said that more budgetary efforts were needed to make the improvements "durable."
Both structural reforms and fiscal improvements are expected to "fall short" of EU recommendations, it noted.
France, which has the second-largest economy in the eurozone, has long struggled to rev up its sluggish competitiveness.
Among other things, the commission called on Paris to provide more detail on planned expenditure cuts in 2016 as well as for the year after, and to identify more "savings opportunities ... including on social security and local government."
Copyright dpa