BERLIN (Reuters) - France should bring its budget deficit back down below the European Union’s 3 percent ceiling this year to help re-establish credibility under President Emmanuel Macron, the European Union’s budget commissioner said.
In an interview with Germany’s Funke group of newspapers, Pierre Moscovici urged Macron, emboldened by his newly-created party’s sweeping success at the weekend’s parliamentary elections, to press on with promised economic restructuring.
“France has to re-establish its credibility as far as reforms are concerned,” said Moscovici, a member of the rival Socialist Party, which lost heavily in the elections. “That relates to the labor market as much as to the budget.”
Macron became France’s youngest leader since Napoleon in May after winning presidential elections with a promise to turbo-charge growth by streamlining regulation. While the pro-European president has been welcomed in Brussels and Germany, some policymakers have cautioned against fiscal profligacy.
France’s central bank said last week that France’s budget deficit would come in at 3.1 percent, above the EU’s 3 percent ceiling, and far beyond the 2.8 percent expected by the previous Socialist government.
“I urge the President to meet the Growth and Stability Pact conditions as soon as this year,” he added. “The French budget deficit must not exceed the 3 percent level in future.”
The Socialists looked set to win as few as 30 seats in the 577 French national assembly after this weekend’s first-round vote, but Moscovici said his party’s travails mirrored those of Social Democrats across Europe.
“My conviction is that the Socialist Party in France is not fit for survival in its current form, but there is space for a new one,” he told the newspapers.
Reporting By Thomas Escritt; Editing by Toby Chopra