France faced harsh criticism on Friday for failing to meet a deadline to put its finances in order, as frustrated euro zone ministers struggled to keep alive their post-crisis strategy for the bloc's stagnating economy, reports Reuters.
Emboldened by the European Central Bank's shift away from austerity, France said this week it will not reduce its budget deficit to within EU limits until 2017, despite having already been granted extra time to do that by 2015.
France's announcement went down badly with euro zone finance ministers meeting in Milan. Some saw it as an affront after the painful cuts many governments have implemented to bring down swollen deficits and win back investor confidence.
"France got it big time," said one senior euro zone official of the criticism doled out at the meeting. Another said no one directly pointed the finger at French finance minister Michel Sapin, "but ministers were very unhappy".
European Central Bank president Mario Draghi later told reporters that EU budget rules "should not be unravelled", while Jeroen Dijsselbloem, the Dutchman who chaired the meeting, said the rules were the "anchor of confidence" in the European Union.
Markets have so far retained confidence in France's highly liquid debt, but euro zone policymakers are anxious to show that governments can be responsible and live within their means.
Tougher surveillance of government finances is one of the euro zone's most far-reaching responses to its debt crisis. It is aimed at avoiding a repeat of free-spending years that saddled the bloc with massive debts and weakened its economy.
While economists doubt the wisdom of severely restricting government spending at a time of weak growth, France, as the euro zone's second largest economy, had been expected to set an example and show budgetary discipline.
Read more of this report from Reuters.