France Misses Deficit Deadline

France is on a collision course with the European Union over its refusal to comply with budget rules governing the 12 nation eurozone. The country had until midnight on Friday to tell its EU partners how it intended to curb its ballooning deficit if it wants to avoid the threat of hefty fines.

But as the deadline passed, France showed little sign of complying with the EU's demands.

The European Commission (EC) is not likely to take action immediately - but it will be under pressure from other member states to force France back into line.

The EC made clear this week that the budget recently unveiled by France did not comply with EU demands that its deficit come in below 3% of Gross Domestic Product (GDP).

The EU executive is expected to draw up detailed budget recommendations for France - the toughest sanction ever attempted against a country - in an effort to safeguard the euro.

But sources quoted by Reuters say France believes its deficit is justified by its economic circumstances.

EU diplomats say France could try to use a get-out clause that invokes "special conditions" - although these conditions have yet to be defined by the EC.

European Finance Ministers will not be asked to endorse any budget clampdown imposed on France by the EU until November.

Demanding a bigger effort from France will only have negative consequences for the French and European economy

But French Finance Minister Francis Mer plans to plead his case at a informal eurozone finance ministers meeting in Luxembourg on Monday.

"I have a meeting with the Eurogroup (of euro zone finance ministers) on Monday evening and I will see how our partners are reacting, bearing in mind that I will seek to convince them of our progress in the right direction," Mr Mer said this week.

But, he added: "Demanding a bigger effort from France will only have negative consequences for the French and European economy."

Smaller member states have ridiculed French assertions that the economic slowdown amounts to an exceptional circumstance.

Austrian Finance Minister Karl-Heinz Grasser made clear the depth of feeling among countries who are complying with the 3% limit in an interview with the Financial Times.

"What France is doing is simply a provocation towards all the other eurozone countries," he said.

France has blamed its inability to reduce its budget deficit next year on the cost of the 35-hour working week, brought in under the previous socialist government.

Economics minister Alain Lambert said the country would do its best to meet the European Commission's requirements - as long as those measures did not plunge France into a recession.

But, he added, the government's hands were tied by its commitment to implement the 35-hour week - which entails extra costs.

"If we had not been committed to this expense, he said, we would be well under 3% of public deficit," he said.

The French economy has been growing far more slowly than anticipated this year, at 0.5% or less, while unemployment is high and rising, at nearly 10%.

The BBC's Caroline Wyatt, in Paris, said it was hard to see how France could reduce its deficit without taking decisions which would make the government even more unpopular at home.

But unless it does, it will find it impossible to avoid becoming the first member of the eurozone to face EU sanctions.

France told the European Commission last month its budget deficit would be 4% this year, and 3.6% in 2004.

The government of French Prime Minister Jean-Pierre Raffarin has pledged to get the deficit under 3% by 2005.

But European Monetary Affairs Commissioner Pedro Solbes has called on Paris to do more to address the problem.

"What France is doing is simply a provocation towards all the other eurozone countries," he said.

Perhaps I can help the french understand the PERMANENT change in U.S. sentiment as well:

1. french President Jacques Chirac, personally helped Iraq begin its nuclear program.
2. france assisted China in shipping raw materials for chemical weapons to Iraq through Syria.
3. french security services helped suppress opposition groups seeking to depose Saddam Hussein.
4. The french had supplied Iraq with precision switches for nuclear weapons.
5. french companies had resupplied Iraq with spare parts for fighter jets on the eve of the March 2003 invasion. Intelligence reports indicated that Iraq was able to obtain French military spare parts for its Mirage jets and Gazelle attack helicopters in violation of U.N. sanctions.
6. The french helped Iraqi officials escape U.S. capture by issuing them EU passports. The passports allowed the Iraqis to evade detection by U.S. military and intelligence agencies because they were EU travel documents.
7. Intelligence officials said France attempted to conclude an oil deal with Saddam's government days before U.S. military action began March 19.
8. french anti-aircraft weapons smuggled into Iraq prior to the war, the Roland 3 batteries, and Roland 5 shoulder-fired anti-air missiles. Reports have still not been denied that these systems were stamped '2002 date of manufacture.'
9. The french peddled disinformation against the Americans before the war -- this is a war for oil, Resolution 1441 does not authorize military action, George Bush is "cowboy," etc. -- at the very least, they now deserve some of their own.
10. The frogs proactively tried to get the African nations to vote against us in the U.N. by sending a french emissary to each sitting temporary Security Council member. Strong rumors of bribes and threats linger today.

Those countries who stood against us before the Iraq War are responsible for EVERY life lost in Iraq -- whether the lives be coalition lives or Iraqi lives. france, more than any other country, is responsible for all the deaths of our warriors.

france had an unemployment rate of 9.3% last month (April 03). It’s rising. Can we help them push it over 10%? 20%?. The new reality show on FOX this fall could be the marxists, socialists, and fundamentalist muslim imports (they are about 10% of the population and growing) burning paris to the ground. You can help:

WE SHOULD NEVER FORGET!

Gotta keep this alive. Share this link with all like minded family and friends. They are feeling the heat.

15000 french products that you can boycott:

http://howtobuyamerican.leethost.com/b-db-boycottfrance.shtml

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