French Prime Minister Manuel Valls came to Brussels on Wednesday (March 18) for a short meeting with Jean-Claude Juncker, meeting with the European Commission president a few weeks after the European executive decided to give France two more years to bring its public deficit under the EU target of 3 percent.
During his visit, Valls confirmed that France will stick to its budgetary commitments by 2017 with the different annual delays agreed by the European Commission and the Council (the 28 EU member states), which include a reduction of French structural deficit by 0.5 percent of gross domestic product in 2015, by 0.8 percent in 2016 and by 0.9 percent in 2017.
France will need to make an extra effort with more savings, and Valls explained that France will also meet it. (audio in French)
“These delays will be respected and all the measures will be undertaken to reach it. Therefore for 2015 France will, as the Commission asked us to do, but also for itself, proceed to an additional structural effort of 0.2 percent of GDP. This will be a big effort; in fact, this represents around 4 billion euros that should be found, as the French president already said, but we will do it,” he said.
However, Valls stressed that France will not take any budgetary effort or measure which will jeopardise any resurgent growth in Europe and in France.
Whereas the European Commission gave Paris around three months, until June 10, to present a set of detailed structural reforms and specific measures, the French prime minister didn’t want to show the pressure of time.
According to him, reforms are needed not only because Europe imposes them: it’s a win-win deal.
“This is a funny idea, analysis, to think that we reform just because the Commission told us to do so. The meaning of reforms is to make France stronger and fairer and not because we should make savings. I don’t think about a punitive Europe, but a Europe which acts,” Valls said.
According to Grégory Claeys, research fellow with the Brussels-based think tank Bruegel, the European Commission is tending to be more flexible towards its fiscal policy, rather preferring a good political deal than sanctions.
“Sanctions are on the table because they are in the legal text, but the new way the Commission wants to apply the fiscal framework is more about political negotiations,” he said. “If France shows that it is ready to reform, to implement some reforms in France and also find the 4 billion issue, I think the sanctions would not be applied.”
Before leaving the European Commission, Valls also confirmed that France will support Juncker’s investment plan to boost economic growth, contributing 8 billion euros through private and public investments.
- Author: Laeticia Markakis, Euranet Plus News Agency