French budget plan not ‘good enough’: Euro bank

The top official at the European Bank said on Monday France's efforts to get its fiscal house in order were not good enough. France has the continent's second biggest economy, but is teetering on the edge of recession.

French budget plan not 'good enough': Euro bank
France's budget plan gets dinged by Euro Bank chief. Photo: Philippe Huguen/AFP

The European Union's executive warned France on Monday that its efforts to fix public finances were falling short.

"Overall, the budgetary strategy outlined in the programme is only partly in line with the requirements of the Stability and Growth Pact," European Commission head Jose Manuel Barroso said on releasing policy recommendations for the EU's 28 member states.

The harshest spotlight of the report had been expected to be on beleaguered France, with the EU's second-biggest economy, which is struggling to reduce its public deficit while teetering on the edge of recession when recovery seems on a solid footing in much of the 28-member bloc.

France, like a majority of member states, is under so-called close supervision by the EU commission, after having missed Brussels-imposed budget targets. Paris has promised 50 billion euros worth of of budget cuts and reforms to get back in the EU's good graces.

Under EU rules, budget deficits — the shortfall between income and spending — should not be more than 3.0 percent of annual gross domestic product.

The 3.0-percent limit was set because it is estimated that European economies are not able to generate enough growth to support the costs of a higher deficit, which would just spiral higher.

Accumulated debt — the sum of all those annual deficits — is supposed to be kept at 60 percent of GDP or falling to that ratio.

But in 2013, France had a budget deficit of 4.3 percent and total debt at 93.5 percent compared with Berlin's zero and 78.4 percent.

Political price of austerity 

The austerity policies adopted to get to the  target has had a political price with France's far right National Front (FN) seizing a historic victory in European elections last week, which also saw unprecedented anti-establishment gains in Britain and Greece.

With the rise of eurosceptics, it is likely the Commission will choose a a more tolerant tone towards countries missing benchmarks and instead encourage France and the others to stay on the path of reform.

"The FN vote has created the view that we have to pay attention to France, that we must not add to its problems and not give the impression that France no longer counts," said one EU official.

Isolating France is notably a worry in Germany where Chancellor Angela Merkel, a strong backer of the EU's embrace of budgetary rigour, has been careful to laud the efforts made by embattled President Francois Hollande.

Hollande, in the wake of the stunning defeat to the FN, said that European leaders had to "heed what had happened in France" or face "other votes in France and elsewhere against Europe."

For now, the financial markets that precipitated the awful days of eurozone debt crisis, have remained largely calm, with only a subdued reaction so far to France's difficulties.

But with a steady trickle of bad data, sentiment on the markets could very well turn.

On Monday, data showed only sluggish manufacturing activity for the eurozone last month, with a particularly poor performance in France.

France was the weakest of the eurozone economies covered by the surveys — its PMI, or Purchasing Managers' Index, indicated that activity fell.

On Monday, Moody's credit agency warned of the fallout from last week's anti-EU vote.

"The rise of eurosceptic parties in France and Greece could prompt both governments to consider easing budgetary consolidation, which would address voters' austerity fatigue, but permit wider deficits than currently planned," the agency said in a note to clients.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.
For members


How to avoid huge ‘roaming’ phone bills while visiting France

Ever wondered how to avoid paying exorbitant roaming fees when travelling in France? There are ways to keep your internet access while avoiding being hit by a big bill.

How to avoid huge 'roaming' phone bills while visiting France

Travelling without access to the internet is almost impossible these days. We use our phones for mapping applications, contacting the Airbnb, even scanning the QR code for the restaurant menu.

If you’re lucky enough to have a phone registered in an EU country than you don’t need to worry, thanks to the EU’s cap on charges for people travelling, but non-Europeans need to be careful with their phone use abroad.

First things first, if you are looking to avoid roaming charges, be sure to go into your settings and turn off “data roaming.” Do it right before your plane lands or your train arrives – you don’t want to risk the phone company in your home country starting the clock on ‘one day of roaming fees’ without knowing it.

But these days travelling without internet access can be difficult and annoying, especially as a growing number of tourist attractions require booking in advance online, while restaurants often display their menus on a QR code.

So here are some techniques to keep the bills low.

Check your phone company’s roaming plan

Before leaving home, check to see what your phone plan offers for pre-paid roaming deals.

For Brits, if you have a phone plan with “Three” for example, you can ask about their “Go Roam” plan for add-on allowance. You can choose to pay monthly or as you go. Vodafone offers eight day and 15 day passes that are available for £1 a day.

For Americans, T-Mobile offers you to add an “international pass” which will charge you $5 per day. Verizon and AT&T’s roaming plans will charge you $10 per day. For AT&T, you are automatically opted into this as soon as your phone tries to access data abroad.

These all allow you to retain your normal phone number and plan.

Beware that these prices are only available if you sign up in advance, otherwise you will likely be facing a much bigger bill for using mobile data in France. 

Buy a pre-paid SIM card

However, if you are travelling for a longer period of time it might work out cheaper to turn off your phone data and buy a pre-paid SIM card in France.

In order to get a pre-paid SIM card, you will need your passport or proof of identity (drivers’ licences do not count).

Keep in mind that you will not be able to use your normal phone number with the new SIM card in, but will be able to access your internet enabled messaging services, like WhatsApp, Facebook and iMessage. Your phone will need to be ‘unlocked’ (ask your carrier about whether yours is) in order to put a new SIM card in.

Here are some of the plans you can choose from:

Orange Holiday

This is one of France’s largest and most reputable telephone companies. The “Orange Holiday” SIM card exists specifically for tourists. At €39.99, you will get a SIM card that will enable you to make and receive calls and texts from a French phone number. You will have unlimited calls and texts within Europe, as well as two hours of calls and 1000 texts outside of Europe (for messaging people at home, for example). You will also have access to 30GB of data in Europe. 

The initial plan is valid for 14 days, and begins as soon as you begin calling, texting, or surfing the web. In order to get this SIM card, you can go into any Orange store and request it. Some supermarkets and airport kiosks might also carry this SIM card.


SFR is another well-known French phone company. Their pre-paid SIM card is called “La Carte,” and they offer several different options based on how much internet, calling, and texting you want access to. The basic plan is for 30 days and starts at €9.99 a month, which includes a €10 credit. Once the card is in your cellphone, you can add on a top-up option as needed.

You can buy this SIM card either online or in an SFR store. 

La Poste Mobile

This is the French phone company that operates in conjunction to the post office. What is especially convenient about this SIM card is that you should be able to get it at any post office in France. Plans range from €5 to €30 based on the number of days and the amount of calling, texting, and internet you are looking for. 

Bouygues Telecom

Finally, Bouygues Telecom also has some offers for prepaid SIM cards. Their plan, the “My European SIM” is especially made for tourists. It costs €39.90 and allows you unlimited calling and texting in France and Europe. The plan offers 20Gb of data. You can plan ahead for your trip by ordering this card online, but you can only activate it once you arrive in France.

The card actually comes along with a tourist guide (offered in 10 languages) and a map of Paris Metro.


Though buying a pre-paid SIM card is a very useful option for visitors spending a decent amount of time in France, it is important to be sure you are buying a pre-paid SIM, rather than accidentally signing up for a monthly plan.

Some mobile phone carriers offer very affordable monthly plans, which might look appealing to tourists. However, these plans will continue charging you after your vacation has ended, and many involve complex processes, including sending a registered cancellation letter (in French), in order to cancel the plan.

UK contracts

If you have a UK-registered mobile phone, check your plan carefully before travelling. Before Brexit, Brits benefited from the EU cap on roaming charges, but this no longer applies.

Some phone companies have announced the return of roaming charges, while others have not, or only apply roaming charges only on certain contracts.

In short, check before you set off and don’t assume that because you have never been charged extra before, you won’t be this time.