Eternal recurrence: Once again the French government plans to blow off EU rules and spend through its deficit cap. Twice already the French government has delayed meeting an EU-imposed target mandating that the deficit not exceed 3 percent of the national output. Now, for the third time, the government will extend the deadline to 2017, with intermediate steps of coming down to 4.4 percent this year and 4.3 percent in 2015. The FT reports:
[Michel Sapin, finance minister] blamed the situation on the slow rate of economic growth and low inflation, saying France demanded that the EU “collectively take into account” an economic slump “unprecedented in recent European history” […]Paris also downgraded its growth forecast for this year for a second time to 0.4 per cent, against an original target of 1 per cent, and cut its 2015 forecast to 1 per cent, down from an earlier estimate of 1.7 per cent.
Things are clearly not going in the right direction for France. Though austerity isn’t popular among Europe’s far-right groups, these kinds of delays and downward revisions will likely only contribute to the political and economic instability giving wings to politicians like Marine Le Pen. France will have to get its house in order soon, or see a continuing descent into deeper economic doldrums and political fallout.