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French finance minister says not in EU's powers to reject budget

Published 07/10/2014, 08:35
© Reuters French Finance minister Michel Sapin leaves the Elysee Palace following the weekly cabinet meeting in Paris

PARIS (Reuters) - Europe's executive arm does not have the authority to reject France's budget over missed deficit-cutting targets, French Finance Minister Michel Sapin said on Tuesday as he announced that no further spending cuts would be made next year.

Euro zone officials have told Reuters that the European Commission is likely to reject the French draft budget at the end of the month and ask for a new one that would be more in line with its commitments.

French officials have said they did not expect the budget to be rejected.

Sapin said the reports were "wrong".

Rejecting the budget "is not within the powers of the Commission," he told RTL radio.

"It cannot censure, it cannot reject the French budget or any other budget," he said. "Thankfully, in our democracies, the only place where we adopt, we reject, we censure, are the parliaments of the countries concerned."

He added that there would be discussions on budgetary questions between various euro zone parties between mid-October and mid-November.

The European Commision has already granted France two extensions on its deficit-cutting targets with the target date most recently reset at 2015. The country said over the summer that it would not bring its deficit down to 3 percent of economic growth before 2017.

Sapin also said France had no plans to raise taxes or introduce additional savings on top of 21 billion euros already planned in 2015.

Asked if the government had ruled out raising new taxes or additional savings measures in 2015, Sapin told RTL radio: "Clearly."

© Reuters. French Finance minister Michel Sapin leaves the Elysee Palace following the weekly cabinet meeting in Paris

"Can you imagine us adding yet more savings measures to the 21 billion in savings, that are already difficult and causing reaction?" he added.

(Reporting By Nicholas Vinocur; editing by John Irish and Andrew Callus)

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