When Prime Minister Joseph Muscat joins his counterparts in the two-day European Council which begins today, he will find the air overshadowed by negative vibes coming, no surprise here, from his friend Francois Hollande.
The weak state of the French economy and uncertain outlook for budget targets was in focus yesterday after official data confirmed that the country is in recession.
The latest figures from the national statistics institute INSEE showed that the economy contracted by 0.2 percent in the first quarter.
This followed shrinkage of the same amount in the last quarter of last year, meaning that France fell back into recession as defined by two quarters running of contraction in output.
INSEE warned that if output is flat in each of the last three quarters of this year, France would post a recession of 0.3 percent for the year.
INSEE had said on Thursday that the economy was set be remain sluggish throughout 2013, and gave its own assessment that for the whole year it would shrink by 0.1 percent.
Weak growth in an economy usually means falling tax receipts, and the right-wing opposition has launched an offensive against the Socialist government this week, arguing that tax receipts are lower, and the outlook for the public deficit higher, than the government says.
In March, President Francois Hollande acknowledged that France would not achieve its initial target of reducing the deficit to the European Union ceiling of 3.0 percent of output in 2013, and said the target was now 3.7 percent.
But a report in the newspaper Les Echoes said yesterday that the public accounting office, in an audit to be published today, will say that the public deficit this year is heading to be 3.7-4.2 percent of gross domestic product.
The outcome depended on how the economy performed, but on the basis of the government's 0.1 percent growth forecast, the deficit would be 3.7-4.0 percent of output.
At the end of May, the European Commission allowed France an extra two years to meet the 3.0 percent deficit target. But this was on strict condition that France pursue structural reform of the economy, notably of the pension system and of employment laws.
France is now said will cut its budget next year for the first time in over five decades in a bid to meet an EU deadline on deficit reduction.
"This is the first time that we will propose such a reduction in parliament. It is a structural effort," French Prime Minister Jean-Marc Ayrault said on Tuesday when presenting a planned cut of €1.5 billion to the almost €400 billion to be spent next year by the government.
Ayrault said state spending has increased continuously since the beginning of the Fifth Republic, in 1958.
Half of the budget cuts will hit ministerial budgets while the other half will target support to local governments.
France is under pressure from the EU, Germany and the International Monetary Fund to deliver on promises to reform its economy and bring its deficit in line with EU rules.
Finance minister Pierre Moscovici downplayed the warning.
"Public spending was under control in 2012 and will be under control in 2013," Moscovici told French radio RTL. Any adjustments to the forecast - if needed - would only be made in a few months, he added.
The French economy is contracting by 0.2 percent and will only rebound at the end of the year, the IMF said earlier this month.
Hollande, the most unpopular president in decades, has failed to deliver on his promise of 0.1 percent growth on which he campaigned before being elected last year.