In addition to the Commission’s approval, the 27-nation European Union must ratify France’s multi-year spending plan at a meeting of finance ministers in January next year.
France will then have an extended period of seven years to adjust public spending to the EU’s key parameters. The extension is part of the European Union’s revamped fiscal framework, which will see countries benefit from an additional three years of putting their house in order if they complete a series of reforms pre-agreed with the Commission.
Brussels can impose shortened sanctions on countries that do not implement promised amendments.
In France, the Commission agreed to review tax expenditures, including exemptions and deductions from the general tax law that reduce overall government revenues.
To secure the extra time, Paris must also deliver on its promise to dilute the phase-out of social contribution discounts for those earning close to the minimum wage.
Commenting on the committee’s assessment, a French finance ministry official said:
“It’s good news and a sign that the government’s budget plans are moving in the right direction.”
The official, who was granted anonymity, added that the committee would lower its rating if France’s highly controversial pension reforms were withdrawn from the package, as demanded by both the far right and the far left.
(Giorgio Leali contributed to this report)
