French public deficit to be well below EU’s 3.0 per cent in 2017, Sapin

France’s public deficit will be “well below” European Union limits in 2017, Finance Minister Michel Sapin declared on Wednesday. Next year’s deficit should also be lower than expected, he told a press conference.

French President François Hollande (R), Prime Minister Manuel Valls (C) and Finance Minister Michel Sapin (R) AFP

Extra reductions in the deficit worth 3.6 billion euros, which were announced on 27 October, will mean that 2015’s deficit will be 4.1 per cent, not 4.3 per cent as previously predicted, Sapin said on Wednesday morning.

And those reductions will have a knock-on effect in 2016 and 2017, he added, meaning that France will be “well below” the EU’s 3.0 per cent required by EU rules in 2017.

President François Hollande’s government originally promised to go below the 3.0 per cent target in 2015 but has since announced that it cannot reach that target.

The European Commission last Friday put off a decision on France’s 2015 budget until next spring, while singling out France for having made “limited progress” in reducing the fiscal deficit.

The government has said that it is not prepared to make more cuts than the 50 billion euros planned over the next three years and has pledged not to raise taxes, a promise that Sapin repeated on Wednesday.

After 0.4 per cent growth in 2014, the French finance ministry is predicting 1.0 per cent in 2015, while the OECD forecasts 0.8 per cent and the European Commission 0.7 per cent.

French private sector activity continued to decline in November, a result that will affect third-quarter GDP negatively, according to small and medium business index Markit.