September 20, 2016 / 7:21 AM / 3 years ago

French central banker urges presidential candidates to heed deficit targets

Governor of the Bank of France Francois Villeroy de Galhau attends a news conference held at the close of the G20 Finance Ministers and Central Bank Governors meeting in Chengdu in Southwestern China's Sichuan province, Sunday, July 24, 2016. REUTERS/Ng Han Guan

PARIS (Reuters) - France’s central bank governor warned presidential candidates on Tuesday that French credibility in Europe hinged on the country respecting the current government’s plans to bring the public deficit in line with EU limits next year.

The main conservative candidates all have programs that would put France on course to break the current Socialist government’s promises to cut the deficit to less than 3 percent of economic output next year.

“All of our European partners expect our deficit to be at less than 3 percent in 2017,” Bank of France governor Francois Villeroy de Galhau said on Europe 1 radio.

“If we are going to be listened to and believed then getting to less than 3 percent is a central condition for our credibility and influence in Europe,” he added.

In preparation for the publication of the 2017 budget at the end of the month, President Francois Hollande’s government is to update its main economic and deficit forecasts on Tuesday.

So far it has targeted a deficit of 2.7 percent of GDP next year, which would be the first time in a decade that the deficit was in line with the EU’s target of no more than 3 percent.

The European Commission has been criticized for not punishing countries that overrun EU budget and debt targets, after it spared Spain and Portugal this summer despite their excessive budget deficits.

Reporting by Leigh Thomas; Editing by Hugh Lawson

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