ECB demands France stick to deficit targets

A top member of the European Central Bank Friday called on France to stick to its deficit-reduction targets after Paris indicated it might miss its goal due to worse-than-expected growth figures.

Joerg Asmussen, from the ECB's six-person executive board, told German radio: "I personally believe it is especially important that France keeps its deficit under three percent this year."

Asmussen was referring to European Union rules that say all members of the 27-country bloc should keep their public deficits below three percent of gross domestic product (GDP).

French Finance Minister Pierre Moscovici said Thursday the targets for growth in 2013 would have to be re-thought after data revealed the economy shrank by 0.3 percent in the fourth quarter of 2012 and growth was zero for the whole year.

Paris has pledged to meet the three-percent target this year but Moscovici hinted that the EU might grant France a delay.

"If they cannot do it, then we have to see whether it is due to a clear and surprising worsening of the economic situation," Asmussen said.

The ECB governor argued that as the eurozone's two biggest economies, France and Germany had a special duty to act as an example to others, adding it would be a "good signal" if they were to stick to European deficit rules.

"The fourth quarter was not good but I think that is in the past. We have signs now, in the middle of the first quarter, that things are a little better," said Asmussen.

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