FRANCE presents its budget to the EU today with French officials likely to provoke a frustrated response after to failing to make agreed savings.
In March, France agreed to make savings of 0.8 per cent of GDP by 2015, but the new budget is expected to save only around 0.2 per cent of GDP. Its debt was downgraded by ratings agency Fitch last night.
It is now within the remit of EU officials to hold a vote among member nations to impose sanctions on France. This would most likely take the form of a fine of 0.2 per cent of GDP.
However, it is likely that the EU will come back with a more lenient spending target.
France has failed to keep its budget deficit under control, consistently missing budget deficit targets over the past two years.
French finance minister Michel Sapin seemed to play down the importance of the EU’s decision to be announced in two weeks time.
“The Commission, I remind you, has absolutely no power to reject or knock down or censure a budget, as I occasionally read. Here, as elsewhere, sovereignty belongs to the French parliament,” he told newspaper Les Echos.