France denies wavering on deficit commitments

By Leigh Thomas PARIS (Reuters) - French officials said on Tuesday they had never wavered on EU-imposed budget targets, rejecting media reports they had tried earlier this month to lay the ground for renegotiation but had been slapped down by Brussels. Conservative newspaper Le Figaro reported on Tuesday that the Socialist government had no choice but to retreat from plans to renegotiate how fast it should cut its budget deficit after Brussels ruled out giving additional time. "At no moment did the president nor the prime minister nor myself ask or plead for extra time," Finance Minister Michel Sapin said in response to a question in parliament. On his first day in the job after a cabinet reshuffle earlier this month, Sapin said France wanted to revise the pace of its deficit reduction. His comments were widely interpreted as implying Paris wants a further extension, beyond an extra two years already granted to the end of 2015, to bring its deficit in line with an EU limit of 3 percent of national output. His remarks chimed with comments from President Francois Hollande who had said his government would have to convince its EU partners its reform efforts should be taken into account when judging Paris' respect for EU promises. Whether testing the waters or simply botching communication on a highly sensitive subject, Sapin's suggestion was ill- received by EU and German officials. Le Figaro reported that two presidential aides found no sympathy for easier deficit targets when they were dispatched to Brussels last Thursday, an interpretation of the meeting which Hollande's office disputed. "There is no change in policy. The aim (of the meeting) was not to seek a delay from the European Commission but to explain France's choices," one source in the office told Reuters. France will publish updated long-term fiscal projections on April 23, which the European Commission will use to determine whether the government is straying from its targets. The European Union's executive arm will in particular be eager to see details about how the government aims to wring 50 billion euros (41 billion pounds) in savings from the budget between 2015 and 2017. With a deficit of 4.3 percent in 2013, Paris has already overshot its 4.1 percent target for last year, which means an even tougher belt-tightening than originally planned will be needed to keep the 2015 target in reach. If the Commission judges France has not done enough to keep the budget on track, it will have little choice but to propose sanctions, one EU official said. Another EU official familiar with the discussions between Paris and Brussels said that where there had been sympathy for granting France extra time last year due to an economic slowdown, that no longer applied. "It's been made clear that France should not misjudge the situation," the official said. (Reporting by Leigh Thomas, Yann Le Guernigou, Julien Ponthus and Luke Baker in Brussels; Editing by Ruth Pitchford)