EU warns France against overspending in 2020 budget

ER Editor: We are issuing an MSM-alert for this short piece from RFI. Of interest is the way the neoliberal, anti-citizen economic agenda that Macron is pushing on France is coming from the European Commission according to this story (pension cuts and job insecurity among others). RFI, of course, will neither explain it nor contest it.

December 5 will see huge strike action by French workers protesting Macron’s proposed pension ‘reforms’ (read: first in a wave of planned pension cuts, which have already started quietly). How much money will he have to promise to get the country back on track? France already gets concessions from the EU, apparently, being allowed to go over budget and deficit limits where other countries such as Italy are not. One wonders if it’s because of whether or not the leader is in favour with the EU politburo (Salvini vs. Macron).

This type of story makes us wonder how deeply people’s heads have to be buried in the sand not to want Brexit, Frexit, etc.

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EU warns France against overspending in 2020 budget

The European Union has listed France among eight countries at risk of breaching the bloc’s public spending rules next year. In Paris’ case, the warning has less to do with a shrinking deficit than a growing public debt.

According to EU fiscal rules for the 19 countries using the euro currency, eight member states were reporting draft budgets looking to exceed deficit limits of 3 percent of GDP and overall debt limits of 60 percent.

European Union Commission Vice President Valdis Dombrovskis warned France along with other EU countries on Wednesday not to breach spending rules in their 2020 budgets.
European Union Commission Vice President Valdis Dombrovskis warned France along with other EU countries on Wednesday not to breach spending rules in their 2020 budgets. Reuters/Francois Lenoir

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“For Belgium, Spain, France, Italy, Portugal, Slovenia, Slovakia and Finland the Draft Budgetary Plans pose a risk of non-compliance with the Stability and Growth Pact in 2020,” the bloc’s governing body, the European Commission, said in a statement.

France is projecting a 3.1 percent of GDP deficit this year – making it the only eurozone country in breach of the limit – but its current draft budget projects 2.2 percent next year.

The bigger concern is France’s debt, which is expected to reach 98.9 percent of GDP at the end of 2020.

The bloc’s governing body, the European Commission, has also warned that France, along with Italy, Belgium and Spain, should do more to take advantage of a favourable economic climate to carry out structural adjustments.

Namely, the bloc wants member states to do more to reduce long-term costs such as pensions, and make it easier to hire and fire workers.

No legal procedures

The Commission did not, however, request any immediate changes to France’s draft budget, nor to those of any of the other seven countries.

“We are not saying that it has to be done immediately,” said Commission Vice President Valdis Dombrovskis, warning that high debt made it difficult “to respond to economic shocks and market pressures”.

The EU’s governing body also highlighted it was the first time since 2002 that it was not taking legal action against member states under its disciplinary excessive deficit procedure.

But the warning has alerted the eight countries that are in the crosshairs. Last year, for the first time, the Commission rejected a national budget – that of Italy, whose debt is expected to reach 136.8 percent of GDP at the end of 2020 and continue to climb in the two years to follow.

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Original article

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