EU’s Moscovici urges France to stick to deficit ceiling

PARIS (Reuters) – France must keep its public sector budget deficit from breaking through an EU ceiling if Paris wants to retain hard-won fiscal credibility, European Economic and Monetary Affairs Commissioner Pierre Moscovici said.

President Emmanuel Macron’s government is deep in the process of drafting next year’s budget and has said the deficit is likely to be between 2.6 and 3.0 percent of economic output.

“It’s very important that the France does not overshoot the 3 percent limit in 2019,” Moscovici, himself a Socialist former French finance minister, told l’Opinion newspaper.

“Breaching this threshold would have an undeniable symbolic and political effect. France is a big European country that wants to lead (and) it must preach by setting a good example,” Moscovici added.

In a boost to Paris’ credibility with its European partners, France brought its deficit under the 3 percent limit last year for the first time in decade.

Macron’s pro-EU government has pledged to keep the deficit in line with the limit and it is facing pressure from the French central bank and International Monetary Fund to detail savings measures necessary to do so.

The government is due to publish its 2019 budget at the end of the month.

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