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EU's Moscovici calls France's missed deficit targets a 'serious problem'

Published 13/09/2014, 13:31
© Reuters Former French Finance Minister and France's candidate for the European Commission Moscovici gestures during his meeting with Greece's Deputy Prime Minister Venizelos in Athens

PARIS (Reuters) - Incoming European Economic and Financial Commissioner Pierre Moscovici said on Saturday that France's missed budget deficit targets were a "serious problem" that he will have to examine in his new role.

France announced on Wednesday it was breaking the latest in a long line of promises to European Union partners to cut its public deficit.

Moscovici, a former French finance minister under Hollande who will be scrutinised in Brussels over how he deals with his home country, has already said it would be out of the question to give France any sort of derogation, suspension or exception on its budget plans, but said he would look at whether there were exceptional circumstances.

The French finance ministry said on Wednesday that the deficit would rise slightly to 4.4 percent this year, before easing to 4.3 percent in 2015 and only approaching the 3 percent EU ceiling in 2017, at the end of President Francois Hollande's five-year term.

"The 4.4 percent deficit is a serious problem, a problem that will have to be dealt with and that will be up to me to examine," Moscovici, who was put in charge of the European Commission's powerful economics portfolio on Wednesday, told BFM Business TV.

French Finance Minister Michel Sapin insisted on Wednesday that Paris was not seeking to change or suspend the rules but wanted the deteriorating outlook for growth and inflation this year and next to be taken into account.

Moscovici said talks with Paris should be based on objective data.

"For example, Michel Sapin says there are exceptional circumstances. The role of the commission is to see within our rules if those exceptional circumstances are real or not," he said.

He stressed that his nationality would not affect his decisions.

"When you become a European commissioner, you remain as somebody with your nationality ... but at the same time you become somebody that defends the general interests of Europe."

Euro zone finance ministers will assess French plans to postpone promised budget deficit cuts only after they see the draft of the 2015 French budget, the chairman of euro zone ministers Jeroen Dijsselbloem said on Friday.

© Reuters. Former French Finance Minister and France's candidate for the European Commission Moscovici gestures during his meeting with Greece's Deputy Prime Minister Venizelos in Athens

All European Union countries have to submit their draft budget assumptions, including the size of the deficit, to the European Commission by mid-October.

(Reporting By Chine Labbe; Writing by John Irish; Editing by Susan Fenton)

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