France will miss its 2015 budget deficit target unless it makes rapid policy adjustments, the European Commission warned on Monday as it unveiled updated economic forecasts for the 28 countries in the European Union, reports Reuters.
France was meant to have cut its deficit to 3.0 percent of gross domestic product by 2013, but the EU extended the deadline by two years due to extremely weak growth in the euro zone's second largest economy.
Paris then delivered a 4.3 percent deficit in 2013 instead of 4.1 percent and is set to miss this year's target too. At the same time, other euro zone countries in far more difficult economic circumstances have managed to meet their obligations.
French Prime Minister Manuel Valls reaffirmed last Wednesday that France intended to stick to the 3 percent target for 2015 after the French parliament backed a 50 billion euro package of savings that will be implemented through to 2017.
Finance Minister Michel Sapin, who will meet his euro zone peers in Brussels later on Monday, said in a statement that Paris would meet the 3 percent target in 2015.
"The government reaffirms its determination to ... make 50 billion euros worth of savings to bring the deficit to 3 percent of GDP in 2015 and bring the pace of public spending growth in line with inflation," he said.
But the Commission, the EU's executive, forecast that unless France goes even further it will end up with a deficit of 3.4 percent of GDP next year. If Paris fails to meet the 3 percent target without a good excuse, it could face fines.
Read more of this report from Reuters.