France pushes Euro treaty despite friction
France is kick starting the ratification of a European Union budget discipline pact that requires Euro zone countries to slash their public deficits in another step to overcome the debt crisis.
The French government on Wednesday gave a green light to the fiscal plan agreed by Hollande's predecessor Nicolas Sarkozy and 24 other EU leaders including Germany's Angela Merkel in March.The cabinet's approval paves the way for official parliamentary ratification on October 2, despite noisy dissent within Hollande's left-leaning coalition and growing disapproval from the French public.The pact requires euro zone countries to slash their public deficits or face legal action and possibly fines. It is the latest small step towards resolving Europe's sovereign debt crisis."We don't like this pact, it is a Sarkozy legacy. Merkel insisted on it because France has been breaking stability pact rules since 2003," said Elisabeth Guigou, head of the French parliament's foreign affairs committee, told Reuters."But you don't have to love a pact to ratify it. It's one part of a deal and just the first step," she said.To balance its budget France has promised to cut its deficit to 4.5 percent of gross domestic product this year from the 5.2 percent last year, before eliminating the shortfall by 2017. The French government is planning 30 billion euro ($39 billion) in tax increases and spending cuts to meet the targets. The split within Hollande’s party reflects the growing political challenge he faces in reviving Europe’s second-largest economy. Some say France could ignore the pact and the deeper measures Germany believes are needed for euro's longer-term survival.“In this EU fiscal pact there is a clause that if the country is in the middle of a difficult situation it can simply ignore the fiscal pact altogether,” political analyst Alex Kobel told RT. “Are you really thinking that Merkel is going to bring Hollande before the European court? Of course not. Hollande will simply say that that the country is in the middle of an exceptional situation and will just ignore the fiscal pact altogether,” Kobel saidBut a vote against the accord within Hollande's coalition will be a political embarrassment. According to the survey Hollande is already facing a steady decline in public support since his election in May.The EU budget pact comes into force when 12 out of the 17 euro zone countries ratify it, or on January 1 next year. Germany together with half a dozen countries has already backed it.
