December 27, 2018 / 12:13 AM / 6 months ago

EU's Oettinger urges France to push budget deficit below 3 percent from 2020

A French flag is seen on the city hall in Beauvais, northern France, November 28, 2018. REUTERS/Gonzalo Fuentes

BERLIN (Reuters) - The European Union will accept France running a budget deficit higher than the EU’s 3 percent ceiling next year, as long as it is a one-off event, EU Budget Commissioner Guether Oettinger said on Thursday.

France said last week that its headline deficit could grow to 3.2 percent of output next year from 2.8 percent initially planned.

President Emmanuel Macron is under strong pressure from violent protests at home to ease the impact of fiscal reforms.

“Under this condition, we will tolerate a national budget deficit higher than three percent as a one-time exception. However, it must not continue beyond 2019,” Oettinger told Funke media group in an interview.

Oettinger said Macron had “lost authority” by releasing a budget draft which exceeds the EU’s 3 percent deficit limit. “But he remains a strong supporter of the European Union.”

Brussels had already reviewed the French budget a few weeks ago and the EU’s executive body would not revisit it again, Oettinger said.

“It crucial now that Macron continues his reform agenda, especially in the labor market, and that France remains on its growth track.”

Reporting by Michael Nienaber; Editing by Peter Graff

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