France will keep its promises, says Manuel Valls

Manuel Valls

Manuel Valls. La Rochelle, 2012. [Mathiew Delmestre/Flickr]

The new prime minister reaffirmed France’s commitment to reducing its national deficit, and ending the government’s unclear stance on EU affairs. EURACTIV France reports.

The issue of France respecting its budgetary commitments to the EU has been resolved. On Wednesday 16 April, during a presentation of a €50 billion savings plan, Manuel Valls claimed that France would meet the targets set by the European Commission to reduce public deficit to 3% by 2015.

“The third objective is to reduce our public deficit. […] We must end this debt-mentality, which is gradually and shrewdly tying our hands”, stated the prime minister, whilst pointing out that French debt increased from 50% of GDP in 2002 to 90% in ten years.

“France, as I said before, will keep its promises. Not out of stubbornness, but because keeping promises is the foundation of credibility and trust.”

>> Read: Brussels rings French deficit alarm

These remarks contrast greatly with his general policy speech to the French National Assembly (8 April). Since the Socialists electoral setback, which was a victory for the National Front, the issue of renegotiating France’s budgetary commitments has been centre stage.

France committed to reducing its annual deficit to below 3% of GDP by 2015, after the European Commission granted it a two year extension.

Tight timetable

France’s message of goodwill to Brussels occurs only days before the French government is to present its stability programme.

The main contents of the programme, which plans to save €50 billion by 2017, were announced yesterday (16 April). It includes €18 billion in savings by the state and its agencies, local administrations savings of €11 billion, and €21 billion in savings, in social protection.

Electoral period

Discussions in Brussels will be affected by electoral obligations. Many European Commissioners have started campaigning for next month’s European elections and are not present in Brussels, such as Olli Rehn, Commissioner for Economic and Monetary Affairs.

Therefore, the partnership between the former French minister for Finance, Pierre Moscovici and Rehn will give way to France’s new Minister for Finance, Michel Sapin, and the Estonian transport commissioner, Siim Kallas. 

Lack of harmony

Michel Sapin reiterated Manuel Valls statements, claiming that France would respect its budgetary commitments, but that it would do so at a slower pace.

“The rhythm has changed. We discussed this with our European partners, so that it was clear. We have a slower rhythm of deficit reduction than what was initially planned, but we will of course respect all our commitments” he declared on RTL.

Minister for Economy, Arnaud Montebourg, conveyed a different message during an interview with a French newspaper, in which he demanded compensation from the European Commission and the European Central Bank.

>> Read: EU’s competition rules ‘stupid and counter-productive’, Montebourg says

“We accept our responsibilities in relation to France’s public deficit,” claimed the minister. “But in exchange, we have certain demands” he warned, suggesting EU support for economic growth in member states, and measures to push down the euro.

With an annual deficit of 4.1% of GDP in 2013, France has exceeded budgetary limits established by the Treaty of Maastricht. The European Commission launched measures to deal with excessive deficit and gave France an extra two years to reduce its public deficit to 3%. French public debt is almost at 95%. The rate of tax contributions is already at 46%. France has proposed a stability plan to reduce governmental spending by €50 billion by 2017.?

  • 23 April: French government presents its stability programme.
  • 30 April: The stability programme is voted on by National Assembly.
  • End of April: EU member states present budget plans to the European Commission.
  • Beginning of June: Commission presents its recommendations on budget plans to member states



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