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France ‘at risk of breaking EU budget rules’

The European Commission has said that France is one of four countries "at risk" of breaking EU budget rules next year because of excessive spending.

Published: 22 November 2023 08:23 CET

France 'at risk of breaking EU budget rules'

France's Minister for the Economy and Finances Bruno Le Maire. (Photo by Thomas SAMSON / AFP)

The three other member states the same risk bracket as France are Belgium Finland and Croatia. Nine further EU countries – Austria, Germany, Italy, Luxembourg, Latvia, Malta, Netherlands, Portugal and Slovakia – were judged “not fully in line” with the rules.

The member countries were asked to take necessary measures to respect limits set for the bloc, EU economy commissioner Paolo Gentiloni told a news conference.

The warnings were issued as part of Brussels’ six-monthly review of budget trajectories in each of the 20 EU countries that make up the eurozone.

Tuesday’s review covered budgetary plans for 2024.

Despite the possible infractions, the commission said it saw no serious risk to financial stability.

France’s finance ministry said its public deficit reduction plan was “on track” to come down from 4.4 percent of GDP to the bloc-wide target of 3.0 percent, by 2027.

It said it believed raised growth projections for France should be taken into account.

The EU’s budget rules were suspended in early 2020 to help the bloc weather the economic downturn from the coronavirus pandemic, allowing state subsidies to flow beyond the usual constraints.

That exceptional measure was extended to the end of 2023 to then cope with the repercussions from the war in Ukraine, with the rules to come back into force on January 1st next year.

The existing rules – called the Growth and Stability Pact – call for an EU country’s public debt to not exceed 60 percent of GDP, and for national deficits to come in below three percent of GDP.

But there is impetus among member states to modify those stipulations, which many feel are too strict and do not allow countries to respond to changing circumstances. Others believe spending levels should be a more valid metric.

A revised pact is expected to be unveiled in December.

Brussels is also recommending that subsidies introduced to mitigate high energy costs for households and companies be reduced. Three countries in particular – Germany, Malta and Portugal – are being called on to rein in their subsidy policies “as soon as possible”.

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Azerbaijan vehemently rejects the accusation it bears responsibility for the riots that have led to the deaths of five people and rattled the Paris government.

But it is just the latest in a litany of tensions between Paris and Baku and not the first time France has accused Azerbaijan of being behind an alleged disinformation campaign.

The riots in New Caledonia, a French territory lying between Australia and Fiji, were sparked by moves to agree a new voting law that supporters of independence from France say discriminates against the indigenous Kanak population.

Paris points to the sudden emergence of Azerbaijani flags alongside Kanak symbols in the protests, while a group linked to the Baku authorities is openly backing separatists while condemning Paris.

“This isn’t a fantasy. It’s a reality,” interior minister Gérald Darmanin told television channel France 2 when asked if Azerbaijan, China and Russia were interfering in New Caledonia.

“I regret that some of the Caledonian pro-independence leaders have made a deal with Azerbaijan. It’s indisputable,” he alleged.

But he added: “Even if there are attempts at interference… France is sovereign on its own territory, and so much the better”.

“We completely reject the baseless accusations,” Azerbaijan’s foreign ministry spokesman Ayhan Hajizadeh said.

“We refute any connection between the leaders of the struggle for freedom in Caledonia and Azerbaijan.”

In images widely shared on social media, a reportage broadcast Wednesday on the French channel TF1 showed some pro-independence supporters wearing T-shirts adorned with the Azerbaijani flag.

Tensions between Paris and Baku have grown in the wake of the 2020 war and 2023 lightning offensive that Azerbaijan waged to regain control of its breakaway Nagorno-Karabakh region from ethnic Armenian separatists.

France is a traditional ally of Christian Armenia, Azerbaijan’s neighbour and historic rival, and is also home to a large Armenian diaspora.

Darmanin said Azerbaijan – led since 2003 by President Ilham Aliyev, who succeeded his father Heydar – was a “dictatorship”.

On Wednesday, the Paris government also banned social network TikTok from operating in New Caledonia.

Tiktok, whose parent company is Chinese, has been widely used by protesters. Critics fear it is being employed to spread disinformation coming from foreign countries.

Azerbaijan invited separatists from the French territories of Martinique, French Guiana, New Caledonia and French Polynesia to Baku for a conference in July 2023.

The meeting saw the creation of the “Baku Initiative Group”, whose stated aim is to support “French liberation and anti-colonialist movements”.

The group published a statement this week condemning the French parliament’s proposed change to New Caledonia’s constitution, which would allow outsiders who moved to the territory at least 10 years ago the right to vote in its elections.

Pro-independence forces say that would dilute the vote of Kanaks, who make up about 40 percent of the population.

“We stand in solidarity with our Kanak friends and support their fair struggle,” the Baku Initiative Group said.

Raphael Glucksmann, the lawmaker heading the list for the French Socialists in June’s European Parliament elections, told Public Senat television that Azerbaijan had made “attempts to interfere… for months”.

He said the underlying problem behind the unrest was a domestic dispute over election reform, not agitation fomented by “foreign actors”.

But he accused Azerbaijan of “seizing on internal problems.”

A French government source, who asked not to be named, said pro-Azerbaijani social media accounts had on Wednesday posted an edited montage purporting to show two white police officers with rifles aimed at dead Kanaks.

“It’s a pretty massive campaign, with around 4,000 posts generated by (these) accounts,” the source told AFP.

“They are reusing techniques already used during a previous smear campaign called Olympia.”

In November, France had already accused actors linked to Azerbaijan of carrying out a disinformation campaign aimed at damaging its reputation over its ability to host the Olympic Games in Paris. Baku also rejected these accusations.