Member states support tough stance on French economy

Italy, Latvia, Lithuania, Hungary and Romania leave excessive deficit procedure.

Finance ministers from the European Union’’s 27 member states today (21 June) backed a European Commission report calling for France to overhaul its pension system and introduce far-reaching economic reforms.

The ministers, meeting in Luxembourg, endorsed the Commission’’s recommendations, which were issued last month, despite resistance from the French government.

The Commission’’s recommendations are part of the EU’’s new tougher surveillance of countries’’ budget plans – but they have to be approved by finance ministers from all member states before becoming official.

As part of today’’s endorsements, Italy, Latvia, Lithuania, Hungary and Romania will leave the EU’’s excessive deficit procedure because they have managed to reduce their deficits to below 3% of gross domestic product (GDP).

The Commission’’s advice for France has caused some consternation in Paris, with François Hollande, France’’s president, saying that it should be the responsibility of his government to decide on the type and pace of reform.

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“The degree of prescription by the Commission was somewhat criticised but we did it with good reason, because we want to give examples to member states”,” said Olli Rehn, the European commissioner for economic and monetary affairs and the euro, who attended today’’s meeting of finance ministers.

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“It’ is important that the objective is met, while member states will choose the ways and means of meeting that objective”,” he added.

In a joint statement after their meeting, the finance ministers said that France’’s pension system would continue to face large deficits and that “new policy measures are urgently needed to remedy the situation”.

They also said that France needed to reform its tax system and reduce public spending.