France announced yesterday it was breaking the latest in a long line of promises to European Union partners to cut its public deficit, conceding it now would take until 2017 to bring its finances in line with EU rules.
The statement by Finance Minister Michel Sapin follows weeks of hints by Paris that weakness in the eurozone’s second largest economy would prevent it bringing the deficit below the EU ceiling of three per cent of output next year as promised.
Sapin insisted France was not seeking to change or suspend the rules but wanted the deteriorating outlook for growth and inflation this year and next to be taken into account.
Paris has led calls for a more flexible interpretation of EU budget regulations along with Italy, but German Chancellor Angela Merkel has rejected any bending of the rules and said yesterday eurozone countries should stick to their commitments.
“The (European) Commission is right to keep up pressure for solid budgets and reforms,” she told parliament in Berlin.
“What applies for Germany also applies unchanged for Eur- ope.”
Upholding those rules will now fall to Sapin’s Socialist predecessor, Pierre Moscovici, who was appointed European Commissioner for economic and monetary affairs in the new EU executive team unveiled yester- day.