The Malta Independent 3 August 2020, Monday

EU allows France to have budget deficit higher than 3% ‘as long as it is a one-off’

Thursday, 27 December 2018, 11:03 Last update: about 3 years ago

The European Union will accept France running a budget deficit higher than the EU’s 3% next year, as long as it is a one-off event, EU Budget Commissioner Gunther Oettinger said on Thursday.

The French government said last week that its headline deficit could grow to 3.2 per cent of output next year from 2.8 per cent initially planned.

Oettinger, however, warned that France will have to push its budget deficit below 3% from 2020.

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“Under this condition, we will tolerate a national budget deficit higher than three per cent as a one-time exception. However, it must not continue beyond 2019,” Oettinger told Funke media group in an interview.

French President Emmanuel Macron is under strong pressure from violent protests at home to ease the impact of fiscal reforms.

The EU Commissioner said Macron had “lost authority” by releasing a budget draft which exceeds the EU’s 3 per cent deficit limit but said the  French President “remains a strong supporter of the European Union.”

The EU had already reviewed the French budget a few weeks ago and the EU’s executive body would not revisit it again, Oettinger said.

“It crucial now that Macron continues his reform agenda, especially in the labour market, and that France remains on its growth track.”

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