France to miss budget deficit target

 
Billy Ehrenberg
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France has admitted that it is not going to make its budget deficit target for 2017. (Source: Getty)

France has admitted that it is not going to make its budget deficit target until 2017.

The target set by the EU is for all nations to reign in their budget deficit (the amount the government has to borrow annually) to three per cent of GDP

Now Michel Sapin, the French finance minister, has indicated that 2017 is too soon and the proportion will be at 4.3 per cent next year, a small drop from this year's 4.4.

France is underperforming compared to the EU 28, and is far behind Germany. The UK may have a larger ratio of borrowing to GDP, but it is seeing strong growth while France flatlines.

France's inability to narrow the gap is in part down to a lack of competitiveness, which is causing weak GDP growth. This has led some to term the nation the "sick man of Europe", once a tag famously held by the UK.

The Eurozone as a whole has been suffering recently, with somnolent growth, disinflation and high unemployment. The latest figures did nothing to brighten the mood, and the European Central Bank has rolled out almost the full war chest of stimulus measures in an attempt to right the ship.

Non-existent growth (see gif) this year has undermined France and unemployment has remained stubbornly high. GDP growth forecasts have been cut to just 0.4 per cent for 2014, down from one per cent.

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