This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.
You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/business/6283702.stm
The article has changed 3 times. There is an RSS feed of changes available.
Version 0 | Version 1 |
---|---|
Sarkozy heading for EU showdown | Sarkozy heading for EU showdown |
(10 minutes later) | |
France's president is heading for a showdown with European finance ministers at a meeting. | |
Nicolas Sarkozy will ask the European Union (EU) to bend its fiscal rules to help avoid a French economic slowdown. | Nicolas Sarkozy will ask the European Union (EU) to bend its fiscal rules to help avoid a French economic slowdown. |
Mr Sarkozy wants to cut French taxes, a move that means France will breach a 3% budget deficit rule set by the EU. | Mr Sarkozy wants to cut French taxes, a move that means France will breach a 3% budget deficit rule set by the EU. |
It will be the first time a head of state has attended a meeting of finance ministers since Silvio Berlusconi went in 2004 to defend Italy's budget. | It will be the first time a head of state has attended a meeting of finance ministers since Silvio Berlusconi went in 2004 to defend Italy's budget. |
Mr Sarkozy, who became president eight weeks ago, has argued that France needs to cut taxes by 11bn euros ($15bn; £7.5bn) and reform higher education in order to tackle the country's spiralling unemployment problem. | |
Should he win the backing of EU finance ministers, then it would mean France failing to balance its books until 2012, two years later than a deadline set by the last government and the EU in April. | Should he win the backing of EU finance ministers, then it would mean France failing to balance its books until 2012, two years later than a deadline set by the last government and the EU in April. |
Mr Sarkozy is expected to meet with ministers later on Monday. | Mr Sarkozy is expected to meet with ministers later on Monday. |
Deadline delay | Deadline delay |
However, critics say that the move will push France's public deficit above EU guidelines, just months after rising exports and a revival in the Eurozone economy helped it fall below the 3% limit. | However, critics say that the move will push France's public deficit above EU guidelines, just months after rising exports and a revival in the Eurozone economy helped it fall below the 3% limit. |
French Prime Minister Francois Fillon confirmed last week that France wanted to delay meeting EU deficit rules until 2012. | French Prime Minister Francois Fillon confirmed last week that France wanted to delay meeting EU deficit rules until 2012. |
The plan has already drawn opposition from Germany and Portugal. | The plan has already drawn opposition from Germany and Portugal. |
"If it were to be confirmed that France is dropping out of the so-called midterm objectives that we agreed with France, with everyone...then there will be a problem," German Finance Minister Peer Steinbrueck said. | "If it were to be confirmed that France is dropping out of the so-called midterm objectives that we agreed with France, with everyone...then there will be a problem," German Finance Minister Peer Steinbrueck said. |
I voted for the euro, I believe in the euro. But in the end, currency is not a taboo subject Nicolas Sarkozy | I voted for the euro, I believe in the euro. But in the end, currency is not a taboo subject Nicolas Sarkozy |
European Central Bank chief Jean-Claude Trichet has also voiced concerns that a "certain member" of the EU is in favour of breaching EU budget rules. | |
However, book balancing is not the only issue that Mr Sarkozy is likely to clash with the EU about during the meeting in Brussels. | However, book balancing is not the only issue that Mr Sarkozy is likely to clash with the EU about during the meeting in Brussels. |
Last week, the French president broke with protocol to criticise the central bank for allowing the euro to appreciate too much. France claims the strong euro hurts its exports. | |
Over the past six years the currency has appreciated by 60% against the dollar. | Over the past six years the currency has appreciated by 60% against the dollar. |
"I voted for the euro, I believe in the euro. But in the end, currency is not a taboo subject. I want it to be of use to growth, of jobs for your children," he said during a speech in Strasbourg. | "I voted for the euro, I believe in the euro. But in the end, currency is not a taboo subject. I want it to be of use to growth, of jobs for your children," he said during a speech in Strasbourg. |
However the comments were seen as controversial as Germany and the central bank fought hard for monetary issues to remain free from political interference. | However the comments were seen as controversial as Germany and the central bank fought hard for monetary issues to remain free from political interference. |