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French website exposes EU budget letter

AFP · 25 Oct 2014, 08:42

Published: 25 Oct 2014 08:42 GMT+02:00

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Paris has said that next year's deficit -- the shortfall between revenue and spending -- will hit 4.3 percent of annual economic output, far above the EU's 3.0-percent ceiling, and as a result Brussels could potentially demand changes to the budget.

"I am writing to consult you on the reasons why France plans to deviate from the budgetary targets set by the Council regarding both the general government deficit and the adjustment in the structural balance in 2015," read the letter sent by the EU's Economic Affairs Commissioner Jyrki Katainen.

"I would also wish to know how France could ensure full compliance with its budgetary policy obligations under the SGP (Stability and Growth Pact) for 2015.

"The Commission seeks to continue a constructive dialogue with France with the view to come to a final assessment."

French President Francois Hollande had confirmed that Paris had received the letter, but refused to make public what he said was "commonplace" correspondence.

The EU Commission has until next week to decide whether France is in "serious" breach of regulations, and could make the unprecedented demand that Paris make changes to its budget.

The heads of the 28 member states met in Brussels Friday to thrash out plans to revive the moribund Europe-wide economy, and their discussions were also due to focus on the budgets submitted by Paris and Rome last week.

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Like France, Italy has also said it will break EU spending rules, which were imposed after the devastating eurozone debt crisis.

Hollande has insisted no budget changes are planned -- but has also said there might be ways to "better calculate" certain expenditures in the Paris budget.

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