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France needs 'damn good story' for deficit breach: Dijsselbloem

21 March 2013, 13:19 CET
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France needs 'damn good story' for deficit breach: Dijsselbloem

Bowles - Dijsselbloem - Photo EP

(BRUSSELS) - France, like all deficit-hit eurozone nations, will need to produce a "damned good story" to explain how it intends to make up for its failure to get back within the EU's deficit threshold, eurozone chief Jeroen Dijsselbloem said on Thursday.

The Dutch finance minister, who chairs the Eurogroup of peers from the debt-challenged 17-state shared currency area, made the comments during a European Parliament hearing in Brussels dominated by the Cyprus bailout crisis.

"If a country such as the Netherlands can't reach the three percent goal, you have to have a damned good story why," Dijsselbloem said in response to a question from a lawmaker.

"In exceptional circumstances, we could allow for an extra year for specific countries," Dijsselbloem said on being pressed.

However, he said this would depend on austerity measures planned in order to ensure the required volume of spending cuts is implemented next year, as well as structural reforms for instance to pensions or retirement policies.

"France, as any other country, will be judged on these criteria," he said when pressed.

He asked: "What are they doing extra in order to reach these goals next year? What are they doing in terms of structural reforms... It goes for France the same as any other country."

Last month, the European Commission forecast that the public deficit in France -- the eurozone's second-largest economy -- would hit 3.7 percent of gross domestic product this year.

Paris was supposed to cut it back to three percent, but blames the external economic environment for weak growth pushing up the deficit ratio and is therefore forced to ask EU partners for more time to deliver on its commitments.


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