France, five others risk breaking bloc’s deficit rules: EU

BRUSSELS, Nov 22, (AFP): The EU warned Wednesday that France and five other countries were at risk of breaching the bloc’s tough public spending rules, adding to the pressure on President Emmanuel Macron to push through tough reforms.

Brussels also sounded the alarm over Italy’s high government debt in a fresh sign of concern over the eurozone’s third largest economy, already buffeted by fears about its banking sector.

The budget warnings come as the youthful Macron tries to push ahead with an ambitious programme of reforms aimed at rebooting the eurozone in the wake of the Brexit vote.

But his plans risk stalling after the collapse of coalition talks in Germany placed the position of Chancellor Angela Merkel, one of Macron’s most important allies, in jeopardy.

“The main message to France is the importance of correction of excessive deficit this year,” Valdis Dombrovskis, the commission vice president responsible for the euro, told AFP in an interview ahead of the release of its assessment of EU states’ draft budget plans.

Belgium, Italy, Austria, Portugal and Slovenia were also judged by the European Commission to be at risk over their deficits — the shortfall between government revenue and spending.

France has long been in the EU’s crosshairs over its deficit, but has previously insisted that the emphasis should be on growth rather than cutting spending.

However, Macron has vowed to reduce public overspending with tough reforms and spending cuts. French lawmakers approved his first annual budget with a thumping majority on Tuesday.

European Union rules adopted since the 2008 global financial crisis give Brussels increased oversight powers to ensure member states meet the target of a deficit that is less than 3.0 percent of gross domestic product.