Courtesy of Mish.
France has been in constant violation of eurozone deficit rules for years, but then again, so has nearly every other eurozone country.
Spain and France Deficit Violations
Both Spain and France have constantly pushed back goals to meet stated targets. Spain has pushed back deficit targets at least six times by my count (official count may vary).
I also have pages on France violations of deficit rules.
Broken Promises
Other sources report similar stories. For example, please consider this Reuters September 2014 headline: France Breaks 2015 Deficit-Cutting Promise.
France announced on Wednesday 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 euro zone’s second-largest economy would prevent it bringing the deficit below the EU ceiling of 3 percent of output next year as promised.
The Agreement
France agreed to cut its budget deficit to 3% by 2015. I am sure we can find agreements for prior years.
Here’s the humorous part (from September):
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.
No Change in Rules?
On November 1, and in regards to France, The Economist says Budget, Fudge It.
France had set itself up for a collision in September, when President François Hollande’s government unveiled its growth forecast. This showed that the country would fail to cut its budget deficit, as it had promised, to 3.8% of GDP this year and 3% next. Instead, the deficit would rise to 4.4% in 2014, before dropping back to 4.3% next year. France, announced Michel Sapin, the finance minister, would not reach the euro zone’s 3% ceiling, originally promised by 2013, until 2017….
