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France approves European treaty on public-spending limits

October 9, 2012 | 10:24 am

France fiscal treaty
PARIS — French lawmakers voted by a large majority Tuesday to adopt the European budget pact that attempts to rein in nations' public spending, a key piece of Europe's strategy to combat its stubborn debt crisis.

After a week of debate, the treaty was ratified by 477 members of the National Assembly, the lower house of Parliament, with 70 members voting against.

The "golden rule" enshrined in the treaty demands that European countries reduce their public deficit to within 0.5% of gross domestic product, or GDP. At present, France's deficit is hovering around 4.6%, though the country's Socialist president, Francois Hollande, has pledged to reduce it to 3% by the end of next year.

The government has admitted that it is unlikely France will reach the standard of the "golden rule" before 2015. The country has not balanced its books in decades and has regularly flouted existing European Union rules that member states keep their spending to within 3% of GDP. In 2011, France's deficit hit 5.2%.

The pact was opposed by members of the far left, the far right and by some in the Green party. Opponents say that by limiting public deficits and debt, the treaty enshrines austerity into French law.

Critics also accused the government of signing a treaty drawn up by Hollande's right-of-center predecessor, Nicolas Sarkozy, and German Chancellor Angela Merkel "without changing a single comma," despite Hollande's campaign promises earlier this year to renegotiate the agreement.

Prime Minister Jean-Marc Ayrault had warned that rejection of the EU fiscal treaty would cause a political crisis at home and on the Continent, and could lead to the collapse of the euro, the currency shared by the 17 countries of the Eurozone.

France is one of the last of the Eurozone countries to approve the pact; without France, the zone's second-biggest economy, as a signatory, the accord would have had little credibility.

"The consequence of a negative vote in our country would be, as you well know, a political crisis and the collapse of monetary union," Ayrault said when he opened the debate last week.

Bruno le Roux, the president of the ruling Socialists in the National Assembly, called on his fellow party members to support Hollande, and the majority heeded that call.

"This is serious at the beginning of a five-year term in office and when it's the first solemn vote of the Assembly. It's a question of political responsibility," Le Roux said.

He told opponents: "Europe is about responsibilities — it's for us to make it. Stop dreaming. Make it!"

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— Kim Willsher

Photo: Jean-Marc Ayrault, the French prime minister, speaks in the National Assembly on Europe's treaty to limit public spending, which France overwhelmingly approved Tuesday. Credit: Etienne Laurent / European Pressphoto Agency.

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