EU gives France two-year grace to cut its deficit

 
Joseph Millis
Paris has been spared a fine (Source: Getty)
The European Commission yesterday gave France until 2017 to get its budget deficit below an EU-imposed limit, sparing Paris a fine and giving it a new two-year grace period after it missed a second deadline to puts its finances in order.

France has repeatedly failed to meet pledges to cut its deficit. It has argued against a German push for austerity at a time of high unemployment.

The decision by the Commission, which also decided against penal­ising Italy and Belgium for increasing public debts, had been expected after officials hinted that imposing a fine on such a power­ful member state was a step too far.

But it raised some questions on the credibility of rules in a Eurozone already buffeted by the Greek debt crisis. “We decided to propose… to set a new deadline for France to bring its deficit below three per cent of GDP by 2017,” commission vice president Valdis Dombrovskis said.

The Commission did not give a detailed explanation of its decision, saying only that steps taken by France to bring down the deficit over the past two years were in the right direction, albeit not enough “in the current context”.

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