France in spotlight of EU economic review

AFP, Brussels :
The EU lays down the law Monday on how member states manage their economies, with struggling France in focus just days after a stunning election breakthrough there for the anti-EU National Front (FN).
The Commission has acquired new powers during the economic and ensuing debt crisis to ensure that the 28 member states respect European Union norms on sound finances and growth.
Monday’s review, to be published around 1200 GMT, will produce a scorecard that is expected to be very good overall for economic powerhouse Germany but much less so for others, such as France and Italy.
The focus will be on deficit and debt levels, as well as what governments are doing to secure growth and jobs.
Under EU rules, budget deficits-the shortfall between income and spending-should not be more than 3.0 percent of annual Gross Domestic Product.
Accumulated debt-the sum of all those deficits-is supposed to be kept at 60 percent of GDP.
In practice, many of the EU’s 28 states have breached these limits, some by a very large margin, and as a result were very badly exposed when the economy was torpedoed by the 2008 financial crash and subsequent slump.
Governments borrowed to fund stimulus programmes and social welfare payouts as the economy tanked, only to find they were out of money and needed to borrow more.
But to do that they had to win credibility with the financial markets, which required adopting stinging and hugely unpopular austerity policies to stabilise the public finances.
For 2013, the average EU budget deficit was at 3.3 percent of GDP, down from 6.5 percent in 2010, the latest Commission figures show. In the single currency bloc, it was slightly better, on the limit at 3.0 percent after 6.2 percent.
But debt levels last year were higher — 87.1 percent for the EU and 92.6 percent for the eurozone, up from 79.9 percent and 85.5 percent, respectively.
As the second-ranked economy, France has attracted increasing attention as it has lagged further and further behind Germany.
In 2013, it had a budget deficit of 4.3 percent and total debt at 93.5 percent compared with Berlin’s zero and 78.4 percent.