The FINANCIAL — BRUSSELS, France came under fire on February 11 from its eurozone partners for not doing more to cut its budget deficit as Paris sought more leeway on improving its finances in the face of weakening growth.
At a monthly meeting in Brussels, eurozone finance ministers were to agree just how much room for manouevre France should get on cutting its deficit, in a decision likely to be endorsed on February 12 by the rest of their EU colleagues.
Eurozone finance ministers committed in April 2007 to balancing their budgets by 2010, which French President Nicholas Sarkozy said after he was elected might not be possible for France.
"We agreed on a commitment in Berlin in April last year that in particular the (big) member states should compel themselves … to reach the medium term objective, at the latest in 2010," German Finance Minister Peer Steinbrueck said.
"I think that is the guidance of our discussion," he said as he arrived for the talks.
France is predicting that its budget deficit will fall to 2.3 percent of gross domestic product this year and 1.7 percent next year, but at that rate it is unlikely to balance its books before 2012.
French Finance Minister Christine Lagarde said France would strive to reach the 2010 target but warned that deadline might not be possible, especially amid weakening economic growth.
"We are making every effort possible to reach balance in 2010 but in the current situation, there's no point telling stories, it will be very difficult," Lagarde said in the Monday edition of Le Figaro newspaper.
However, Dutch Finance Minister Wouter Bos dismissed the idea that worsening growth prospects were grounds for allowing more leeway on fiscal discipline.
"The French already asked for that even before there was a downturn so I don't think that's the real argument," Bos said as he arrived for the meeting.
"People's confidence in Europe will only grow if the rules we have all agreed on, are complied (with) by every country, small ones and big ones alike," he added.
Lagarde said she would "invite our partners to look at all the structural reforms we have already undertaken (and) … remind them that the results cannot be felt in a year."
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