While a letter from Brussels to France about its draft budget warms spirits, and there are only a few days before the European Commission gives its opinion thereon, Francois Hollande appears confident and serene. The president, who spoke at the end of the EU summit in Brussels at a press briefing, Friday, Oct. 24, opts for dialogue, without questioning the French policy.
“We believe we have done what we had to do: continue to reduce the structural deficit to $21 billion in savings, carry out quite significant structural reforms, and empower our economy with the pact of responsibility.”
“France wants to preserve all the conditions for growth, respect for treaties and comply with maximum flexibilities permitted by the treaties.”
Mr. Hollande explained that Paris would respond “at the end of the week” at the request of European explanation, saying already:
“The explanations and details that we provide will make it clear to the Commission that we respect treaties preserving because that’s the point, growth and employment. What we hope is not to receive letter afterwards. ”
Five countries have received the same letter – Italy, France, Austria, Slovenia, Malta – but only Italy has released the document. In France, the government has refused to broadcast it, but it has still leaked. “This is a very common letter,” consistent of “procedures” and “having no significance beyond asking a number of information and clarification,” warned Mr. Hollande, seeking to minimize the scope of the document.
President Francois Hollande said on Thursday that the forecast for 1% growth for 2015 appeared “realistic”, despite the scepticism of the High Council of public finances.
In Brussels, discussions with Paris are described as very tense. To the point that the European Commission expresses its commitment to be issued Wednesday, October 29, a negative opinion on the copy presented by Paris if the talks do not progress by then, indicate consistent European sources.
The Commission must give an opinion on the state of budgets of the euro zone – it is only advisory – by the end of November. This is a detailed document, for each country, evaluating what is going well and less well in terms of commitments to redress public finances. Since the signing of the Stability Pact in 1997, no country has ever seen to impose a sanction for non-compliance of debt and deficit.
If the Commission discerned a “serious breach” of its obligations under the Covenant, it should ask the State concerned, before October 30, to revise the project – which has yet to occur, especially as the notion of a serious breach is not clearly defined. So that might happen in France, in the course of next week.