Crisis-wracked France on Wednesday pushed back its target to hit EU deficit rules by two years, potentially putting the eurozone’s second-biggest economy on a collision course with Brussels.
Finance Minister Michel Sapin said Paris would not get its budget deficit down to the EU limit of three percent of gross domestic product (GDP) until 2017 — two years later than originally forecast.
France had promised Brussels that it would return to three percent next year, but Sapin said the deficit in 2015 would come in at 4.3 percent — a far cry from the maximum permitted.
For this year, Sapin said the deficit would be 4.4 percent of GDP.
Sapin also revealed that growth this year would be a sluggish 0.4 percent, following two quarters during which the economy stagnated completely.
Officially, Paris was banking on a growth rate of one percent this year, but Sapin had already admitted this was too bullish and predicted last month the economy would grow by “around 0.5 percent.”
The French economy is seen recovering slightly next year, with 1.0 percent growth, Sapin said.