France vows deficit 'well below' EU limits by 2017

PARIS - France's finance minister said on Wednesday that the French public deficit would be "well below" EU limits by 2017, as he trimmed his deficit forecasts for next year.

French Finance Minister Michel Sapin, pictured during a press conference in Berlin, on December 2, 2014

Michel Sapin said that "new measures" announced in October would push France's 2015 deficit down to 4.1 percent of gross domestic product, compared with the 4.3 percent previously feared.

However, the figure is still well above limits set by the European Union, which imposes a ceiling of three percent of GDP for its members' deficits.

France stunned its European partners in September by pushing back a pledge to squeeze its public deficit below the three percent ceiling from 2015 to 2017, when the next presidential elections are due to be held.

Last month, the EU gave France -- along with fellow deficit laggards Italy and Belgium -- an extra three months to fix their budgets but warned they would still incur humiliating penalties if the nations failed to curb spending.

The European Commission, the EU's executive arm, singled out France for special criticism, saying it had made "limited progress" in reducing fiscal red ink.

French Prime Minister Manuel Valls has defended the country's budget as the best balance between fiscal rigour and economic stimulus, as Europe's second largest economy battles sluggish growth and high unemployment.

The French economy grew by a meagre 0.3 percent in the third quarter, according to official figures published last month, following two previous quarters of zero growth.