Thursday, September 26 16:45:06
The EU's economics chief put aside any frustration with the pace of French reforms today, telling France's finance minister that his budget plans were on track and avoiding mention of ballooning pension costs.
Relations between Brussels and Paris have been tense since the European Commission, the EU executive, told France to cut spending and reform its pension system in return for a two-year reprieve on meeting European budget targets.
President Francois Hollande has warned the Commission not to tell France how to modernise its frail economy but his finance minister Pierre Moscovici still sought to reassure Brussels, a day after presenting the French budget for 2014.
"France has made a huge effort to restore its public finances, and this draft budget law is characterised by responsibility and prudent policy making," Olli Rehn, the EU's economic and monetary affairs commissioner told a joint news conference with Moscovici, waving a copy of the French budget.
Rehn made no mention of Hollande's pension reform plans, which do not raise the country's retirement age as the Commission has demanded. Germany also wants to see the euro zone's second largest economy address overspending.
Brussels says Paris is not taking radical enough action to combat rising labour costs, a falling share of international export markets and an industrial decline, threatening a shock to its economy that would resonate through the 17-nation euro zone.
France's economic well-being is central to the health of the currency area, but the country's pride in its status as a leading member of the European Union means it resists taking advice from EU institutions.
The pension reform, among the most closely watched measures undertaken by Hollande since he took office in May 2012, aims to fill a hole in the pension system that could reach almost 21 billion euros ($28 billion) by 2020.
Though Hollande's reform will lengthen the number of years worked, it does not change the legal retirement age of 62 years for a full pension, which is one of the lowest in Europe. (Reuters)