France adopts EU budget treaty

Hollande needs Right-wing support to win Senate vote and says it will mean 'serious fiscal discipline but also growth'

11 October 2012
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FRANCE has ratified the European budgetary discipline treaty, the 13th country to do so and the ninth in the Eurozone.

The vote in the Senate, by 306 to 32, will be a relief for President Hollande even although he needed votes from Right-wing parties to force the measure through as the Left has no majority in the upper house.

Hollande had attacked the treaty during his election campaign and promised to get it changed if elected - but succeeded only in getting additional growth measures tacked on.

He said it was vital to adopt the treaty to protect the euro and help maintain European unity.

It contains measures to force most EU countries to reduce their budgetary deficits to 3% of gross domestic product. Countries with major debt problems must keep their deficits under 0.5% of GDP.

Socialist leader in the Senate François Rebsamen denied that the treaty was exactly the same as the one ex-president Nicolas Sarkozy had negotiated. He said it now "took a new approach to Europe's future" and left the French parliament in control of the country's own finances.

After it was passed by the National Assembly - without the need for Right-wing support - Hollande said it would allow for “stability, serious fiscal discipline but also growth”.

He has committed France to abiding by the treaty's terms and his government's recent budget - with €30billion of tax increases and spending cuts - is intended to hit the 3% deficit target in 2013.

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