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French Budget Deficit May Push Entire Eurozone Over Limit - 2003-09-02

The European Commission says France's large budget deficit could push the entire "eurozone," over its deficit limit this year. The eurozone is the 12 nations that use the common euro currency.

The report came from the European Commission's monetary affairs spokesman Gerassimos Thomas in Brussels. He says France's forecast of a four percent deficit in 2003 is significantly higher than what the French government recently told EU finance ministers to expect.

Mr. Thomas says this has implications for the larger 12-nation eurozone.

"Given the fact that France seems to have gone off the rails a bit in 2003, the eurozone deficit will be around three percent, if not exceeding the three percent figure," he said. "Of course this will have an effect on the general eurozone."

The countries in the eurozone are under an economic pact that sets a three percent limit for deficits.

Mr. Thomas says Paris will have to impose more budget discipline next year. But France says that will be difficult. French Budget Minister, Alain Lambert, says the country will try to reduce its deficit, in line with its international commitments, but he said the government's first duty is to restore economic growth and create jobs.

Both France and Germany, the two largest eurozone economies, are far above their deficit limits.