France cornered amid EU deficits charge


French Finance Minister Christine Lagarde smiles before the start of an Economy and Finance Council meeting at EU headquarters in Brussels. France was cornered among Europe's big guns on Tuesday as it sought to avert a public slap from the European Union this week over ballooning deficit levels.

French Finance Minister Christine Lagarde smiles before the start of an Economy and Finance Council meeting at EU headquarters in Brussels. France was cornered among Europe's big guns on Tuesday as it sought to avert a public slap from the European Union this week over ballooning deficit levels.

The City & My Life|AFP France was cornered among Europe’s big guns on Tuesday as it sought to avert a public slap from the European Union this week over ballooning deficit levels.

The European Commission is to order France on Wednesday to bring its bloated public deficit — set to reach 8.5 percent of GDP in 2010 — back to within three percent of gross domestic product by 2013.

However, the French argued at talks between EU finance ministers in Brussels that 2014 is a more reasonable deadline, which would mean an extension of one year more than any other country can get under formal excessive deficit procedures.

“The French are being totally unreasonable,” said an EU source, adding that the cost of servicing France’s debt by 2011 “will be greater in the French budget than the education provision.”

Under European Union regulations, member states are bound to hold their annual public deficits to three percent of output — with Economic and Monetary Affairs Commissioner Joaquin Almunia insisting “fair” treatment will be meted out to all, big or small.

Spain and Germany will also be given until 2013 to comply, although Britain will be allowed leeway until 2015 to fix its annual budget, and none of these countries has mounted rearguard action.

The EU official added: “The Germans believe in budgetary discipline, that’s the big difference … Some small countries are lining up behind France, but (Paris) won’t have the same clout as Germany.”

French Finance Minister Christine Lagarde, for her part, insisted that Paris was still “negotiating” with the commission over the deadline.

“Quite clearly 2015 is too far down the line. 2012 is too soon,” she said. “But between the two (dates), there is 2013 and 2014.

“It is obvious that 2014 already represents a fine effort — I think 2013 will be extremely difficult, that’s what I told my colleagues” at a meeting of EU counterparts in Brussels.

Twenty of the 27 EU nations have so far been warned for breaching guidelines designed to promote stability and growth across intertwined economies.

Only seven EU members — Bulgaria, Cyprus, Denmark, Estonia, Finland, Luxembourg and Sweden — have respected the three percent limit.

Member states have formally agreed to start beating a retreat on unsustainable housekeeping by 2011 at the latest, ongoing recovery permitting.

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