[autom.vertaling] De Commissie geeft het verblijf van Frankrijk van uitvoering (en)

The burning question of whether the Commission would dare to fine the euro zone's second largest economy for breaking its rules seemed to have been resolved over the weekend - in favour of France.

In an interview with French daily Le Monde on Saturday (10 October), the economics and monetary affairs Commissioner, Pedro Solbes, said that Paris would be given a stay of execution of one year to get its deficits in order.

"In my opinion, we will no longer explicitly ask France to get back under the threshold of three percent in 2004, but it will have to ensure that it gets under that threshold in 2005", said Mr Solbes.

France's deficit - basically its tax revenue minus its public spending - is expected to be four percent of its GDP this year.

The Commission's rules - known as the Growth and Stability Pact - allow a maximum of three percent of GDP. But Mr Solbes said that to achieve the necessary reduction is unrealistic given France's poor economic situation.

"To ask France to reduce its public deficit from four percent in 2003 to less than three percent in 2004 would be to demand an effort which would be difficult to justify from an economic point of view", said the Commissioner.

Not quite off the hook

But France is not quite off the Commission's hook. Mr Solbes called for more effort in reducing the deficit in 2004.

Paris anticipates slashing its structural deficit - which does not take account of economic factors, like slow growth - by 0.6 percent in 2004. Not enough, says Mr Solbes, who insists on a cut of one percent next year.

This means that France will have to find an extra six billion euro in public spending cuts and Mr Solbes conceded that it "will not be easy".

Now for Germany

Attention may now focus on Germany's deficit, which, according to German media reports, is set to reach record highs this year.

Germany's deficit may therefore also reach four percent this year but Berlin will be less concerned now that the Commission has shown it is prepared to be lenient.

Both Jacques Chirac - France's President - and Gerhard Schröder - German Chancellor - have argued that the EU's stability pact, which sets the three percent limit, should be softened.

At a joint press conference on Sunday evening in Paris, Mr Chirac said that reducing deficits must not come at the expense of growth and Mr Schröder repeated his call for a more flexible pact.

However, many economists believe that the Commission is placing the credibility of the rules underpinning the euro at risk, by not enforcing them strictly for big countries. Smaller countries - especially the Netherlands - have also argued that the rules should be applied firmly to France and Germany.