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EU gives guarded blessing to French stability plan

BRUSSELS: The European Commission gave a qualified blessing on Wednesday to French budget plans for the next three years.

In a statement, the European Union executive said the plans were in line with the requirements of the EU's stability pact but warned Paris against using tax cuts to accelerate growth."The allocation of budgetary margins for larger tax cuts than those projected in the updated stability programme would be considered as pro-cyclical," the Commission said.

It added that, if there were any tax windfalls from higher growth, "the opportunity should be taken to reduce the deficit faster".

In its latest update on EU member states' stability plans, the Commission also said France's forecast of three percent growth over the next few years was realistic.

In addition, it noted that France's 1999 budget deficit was lower than the forecast 2.1 percent of Gross Domestic Product, but it gave no figure.-Reuters