EU gives France until 2017 to fix deficit: commissioner

The EU has given France a further two years until 2017 to bring its budget deficit back into line with Brussels rules, meaning the eurozone's second biggest economy avoids a fine for now.
Paris must however present a reform plan to Brussels by April to show how it intends to get its finances back in order, added the European Commission, the executive body of the 28-nation EU.
Italy and Belgium will face no action because they have made enough progress toward bringing their deficits back into line with European Union spending regulations that were tightened in the wake of the eurozone debt crisis, the EU said.

"Today we have decided to propose a new recommendation to France as to how to address its excessive deficit, and set a new deadline for it to be below 3.0 percent, this being by 2017," the bloc's euro commissioner Valdis Dombrovskis told a hastily-arranged press conference yesterday.
Theoretically eurozone countries face penalties if their deficit stays above 3.0 per cent of economic output but any fine against one of the EU's founding members such as France would have been unprecedented.
In November, the EU gave France, Italy and Belgium an extra three months to come up with plans to cut their deficits back below the 3.0 per cent of GDP limit.

France, the eurozone's biggest economy after Germany, had already made two previous requests for an extension, firstly under the presidency of Nicolas Sarkozy and then under current President Francois Hollande.

France will have to submit a new economic reform programme to Brussels in April, EU Economic Affairs Commissioner Pierre Moscovici said.
"France has already announced reforms in the past few days. We expect France to present a more complete national reform programme in April which we will consider in May," added Moscovici, a former French finance minister.
The new deadline is in politically sensitive territory during France's next presidential election in 2017.

Feeling the pressure from the EU, Paris in December revised its deficit forecast for 2015 to 4.1 per cent from 4.3 per cent, still way above the EU's 3.0 per cent ceiling.
It also revised its estimates for 2016 to 3.6 per cent and for 2017 to 2.6 per cent.