MNI: EU Expects France To Request 7-Year Fiscal Plan-Officials

MNI (LONDON) - The European Commission expects France to request and obtain an extension of its medium-term fiscal structural plan from four to seven years, meaning that the country's path towards bringing its deficit back to 3% could also be stretched over a longer period, officials have told MNI.

France has assured the Commission it will submit a draft 2025 budget plan by the EU's Oct 15 deadline, but has asked for a delay until the end of October to present its medium-term debt plan, which is required under the new fiscal rules. 

The Commission is likely to make recommendations for the correction of the country’s excessive deficit in its autumn package likely in November along with those for six other states facing excessive deficit procedures, together with its assessment of their medium-term financial strategies.

The Commission has made clear that implementation of the new rules will need to balance a realistic and achievable fiscal plan with ensuring credibility among investors. The rules allow for extensions of the new fiscal-structural plans from four to seven years in return for commitments to productivity-enhancing reform and investment.

Should there be a delay to the submission of any country’s plan, the Commission would make its recommendations for a deficit’s correction – normally 0.5% of GDP per year in structural terms – based on a four-year plan. (See MNI POLICY: EU Wants Poland To Adjust Deficit More Slowly). This would be superseded by a seven-year plan as and when such a request from a member state is approved by the EU.