Low growth rates mean French will not meet deficit targets

Reuters.com – 13/02/13
The French government have admitted that they will not meet their deficit target of 3% of nominal GDP by the end of this year, an agreement that was made with the European Commission. This was announced shortly before news of a 0.3% shrink in the economy in the fourth quarter of last year was released. On Wednesday, French Prime Minister, Jean-Marc Ayrault, said that the deficit will “not be exactly at 3% at the end of the year”, but maintains that the government’s pledge to eliminate the deficit by 2017 is still possible.

Low growth rates on a French, European and Global level are said to be the reason that this deficit target will not be reachable, according to Ayrault. Many are suggesting that the optimistic Frenh growth rate target of 0.8% may be reduced. The European Commission has stated, in communication with French Ministers, that it may extend the French deadline for reducing the budget deficit if growth deteriorates unexpectedly. Read More