It may be possible to give France longer to reach its public finance goals as agreed with the European Union, if the country has made the necessary reforms, with the matter to be reviewed in May, the EU's economic chief said Friday, reports The Wall Street Journal.
"If our Spring forecasts (due in May) show the structural fiscal adjustment is beyond 1% a year over the period of 2010 to 2013 and if there are unexpected economic events that have major unfavorable consequences for public finances, then the growth and stability pact would allow the deadline to get the deficit clearly below 3% to be pushed to 2014," EU Commissioner for economic and monetary affairs Olli Rehn told reporters when presenting the winter forecasts.
The gross domestic product of the euro zone's second largest economy will expand only 0.1% in 2013, according to the Winter forecasts from the EU's executive arm. The French government had been using a 0.8% growth forecast as a basis for its plan to bring the deficit down to 3% of GDP.
"Deadlines can, or may be, extended if first, the recommended structural fiscal effort...excluding cyclical and one-off effects has been delivered," he said, referring to the EU as a whole. "And secondly, if major growth shortfalls have an impact on public finances."
He said that reform programs should include a full examination of public expenditure in France, and that "given the major competitiveness challenges facing the French economy, France will need to pursue parallel fiscal reforms."
He added that reforms must continue to ensure the long-term viability of the pension system and other areas too.
Read more of this report from The Wall Street Journal.