| Author (Corporate) | European Commission |
|---|---|
| Series Title | COM |
| Series Details | (2013) 384 final (29.5.13) |
| Publication Date | 29/05/2013 |
| Content Type | Policy-making |
|
According to Article 126 of the Treaty on the Functioning of the European Union (TFEU), Member States shall avoid excessive government deficits. On 27 April 2009, the Council decided that an excessive deficit existed in France and issued recommendations to correct the excessive deficit by 2012 at the latest, in accordance with Article 3 of Council Regulation (EC) No 1467/97 of 7 July 1997 on speeding up and clarifying the implementation of the excessive deficit procedure. On 2 December 2009, the Council decided that although effective action had been taken by the French authorities, unexpected adverse economic events with major unfavourable consequences for government finances had occurred after the adoption of the recommendation. As a consequence, the Council recommended that France correct its excessive deficit by 2013 at the latest. The Commission services' 2009 Autumn Forecast, which was underlying the Council recommendation of 2 December 2009, projected that the French economy would expand by 1.2% in 2010 and 1.5% in 2011. The years 2012 and 2013 were beyond the forecast horizon, but under the assumption of a gradual closure of the large negative output gap by 2015, higher growth than in 2011 was expected for 2012 and 2013. GDP growth in 2010 was substantially above that expected in the Commission services' 2009 Autumn Forecast, in 2011 it was slightly above the projected 1.5%, while in 2012 the French economy stagnated. The Commission services' 2013 Spring Forecast projects GDP to decrease by 0.1% this year, implying a much worse scenario for 2013 than the one underpinning the December 2009 Council recommendation. The weakness of households' real disposable income linked in particular to rising unemployment and tax increases will be only partly offset by inflation slowing down, while low business confidence is expected to lead to a continued fall in investment. The substantial deterioration in the budgetary position resulting from the weaker overall position of the economy relative to the one underlying the 2009 Council recommendation suggests that revised recommendations for France extending the deadline to correct the excessive deficit are justified, consistent with the rules of the Stability and Growth Pact. |
|
| Source Link | Link to Main Source http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM:2013:384:FIN |
| Related Links |
|
| Countries / Regions | France |
