‘Take responsibility for France budget deficit’, says Solbes

By Peter Chapman

Date: 30/10/03

PEDRO Solbes, the commissioner for economic and financial affairs, has told member states to do their duty and back moves to bring France's wayward budget deficit into line.

The Spaniard was responding to claims that France, Germany and Italy will oppose the Commission's latest recommendations to stem France's budget deficit - expected to break until at least 2005, the EU's Stability and Growth Pact, which limits budget deficits to 3% of national income.

He said: “The procedure is well defined we have fulfilled our obligations. The problem is now in the hands of the Council of Ministers. It is up to the Council to take its responsibility.”

The Commission has called on Paris to take urgent measures to rein in its budget - including a controversial demand for up to €6 billion euros in budget cuts next year.

The recommendation is the last stage in a tortuous process that could eventually lead to massive French fines of 0.5% of national income.

The issue is on the table at next week's meeting of EU finance ministers (Ecofin). However, German Chancellor Gerhard Schröder and Italian Prime Minister Silvio Berlusconi have indicated their support for France.

Schröder told reporters after a meeting with French premier Jean-Pierre Raffarin that “an opinion that would go against us would be negative”.

Berlusconi last week called for a loosening of the stability pact to allow deficits of 4% of national income during an economic slowdown.

The big three's budget stance is unpopular in capitals of smaller member states, however. Dutch Finance Minister Gerrit Zalm, who is pressing ahead with tough cuts, has threatened to take a case to the European Court of Justice if France is let off the budget hook.

Pedro Solbes, European Commissioner for Economic and Financial Affairs, has told Member States to back plans to bring France's budget back into line.