The EU officially recommended that France be removed from Brussels' public spending penalty box after more than a decade, handing a win to French President Emmanuel Macron in his push to gain the trust of austerity-pushing Germany.

The European Commission, the EU's executive arm, formally proposed to take France out of the so-called excessive deficit procedure that was first opened in 2009 at the start of the eurozone debt crisis.

"It is an important moment for France after nine years of a long, painful procedure and sometimes painful but necessary budgetary efforts," said EU Economic Affairs Commissioner Pierre Moscovici at a news briefing.

The European Commission forecasts that France will hit a deficit of 2.6 percent of GDP in 2017, below the EU's three percent limit.

This would be followed by 2.3 percent in 2018, then 2.8 percent in 2019, the European Commission estimated in its latest economic forecasts.

Macron saw lowering the deficit as key to earning credibility with European leaders, especially German Chancellor Angela Merkel, as he pushes ambitious reforms to the eurozone.

France was one of the last two countries in the eurozone, along with Spain, still under the threat of the excessive deficit procedure, which can lead to sanctions and fines.

But eyes are now turning to Italy, whose populist and eurosceptic government has promised to flout EU budget rules, which also include a 60 percent of gross domestic product (GDP) cap on public debt.

The commission's proposal on France will have to be formally endorsed by EU finance ministers at a meeting in July. </s> The European Commission, the EU's executive arm, formally proposed to take France out of the so-called excessive deficit procedure that was first opened in 2009 at the start of the eurozone debt crisis.

"It is an important moment for France after nine years of a long, painful procedure and sometimes painful but necessary budgetary efforts," said EU Economic Affairs Commissioner Pierre Moscovici at a news briefing.

The European Commission forecasts that France will hit a deficit of 2.6 percent of GDP in 2017, below the EU's three percent limit.

This would be followed by 2.3 percent in 2018, then 2.8 percent in 2019, the European Commission estimated in its latest economic forecasts.

Macron saw lowering the deficit as key to earning credibility with European leaders, especially German Chancellor Angela Merkel, as he pushes ambitious reforms to the eurozone. France was one of the last two countries in the eurozone, along with Spain, still under the threat of the excessive deficit procedure, which can lead to sanctions and fines. </s> BRUSSELS (Reuters) - The European Commission on Wednesday recommended closing a European Union fiscal procedure against France, nine years after it was opened, saying the country had embarked on a “solid” path towards reducing its deficit spending.

The widely expected move comes as France’s deficit dropped below the required ceiling last year and is expected to stay below 3 percent of gross domestic product this year and next.

“We believe that the trajectory of France is robust and solid,” the EU economics commissioner Pierre Moscovici told a news conference.

The EU opened the procedure against France in 2009 when it expanded its public spending in the face of the global financial crisis.

The procedure could lead to fines but the commission has so far refrained from imposing financial sanctions. EU states decide the formal closure of a procedure following a commission’s proposal.

After years of spending above the EU limits, France recorded a deficit of 2.6 percent of its gross domestic product last year, as economic growth strengthened and President Emmanuel Macron took office.

The Commission forecast that the French deficit will drop further this year to 2.3 percent of GDP and will remain below the 3 percent ceiling in 2019.

However, the country’s debt remains well above the EU limit of 60 percent of GDP at over 90 percent of the economy. France is also the EU state with the highest level of public expenditure, the commission said.

“The effort should now focus on reducing the structural deficit and on improving the quality and the structure of the public expenditure,” Moscovici said.

In a statement released after the commission’s recommendations, France’s Finance Minister Bruno Le Maire said the French government would respect its fiscal commitments and pursue reforms to facilitate growth. </s> Issuing its annual recommendations for economic development to member states, the EU executive on Wednesday said in was in favor of removing France from Brussels' public spending penalty box after more than a decade of discontent with Paris' deficit policy.

The recommendation was perceived in France as a victory for French President Emmanuel Macron, who had been struggling to regain the trust of austerity-pushing Germany.

The European Commission formally proposed to take France out of its so-called excessive deficit procedure that was first opened back in 2009 after the start of the eurozone debt crisis.

"It's an important moment for France after nine years of a long, painful procedure and sometimes painful but necessary budgetary efforts," EU Economic Affairs Commissioner Pierre Moscovici said at a news briefing.

France out, Italy in?

The EU executive forecasts that France will log a deficit of 2.6 percent of gross domestic product (GDP) in 2017 to be followed by 2.3 percent this year, both below the bloc's 3-percent limit.

France was one of the last two eurozone nations, along with Spain, that was still under the threat of having to pay fines or having to accept sanctions for overspending.

Eyes are now turning to Italy whose populist and euroskeptic government has indicated it's willingness to ignore EU budget rules in order to push through its costly coalition treaty plans.

Brussels warned on Wednesday that the incoming Italian government must make it a priority to cut its heavy public debt.

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hg/mm (dpa, Reuters) </s> “The Commission has also taken a number of steps under the Stability and Growth Pact. The Commission recommends that the Excessive Deficit Procedure be closed for France. This would leave only one Member State (Spain) in the corrective arm of the Pact, down from 24 countries in 2011,” the statement read.

READ MORE: France Leading EU Producer of Nuclear Power in 2016 — Eurostat

France and Spain are last two countries in the EU, that are under the hazard of the excessive deficit procedure, which can lead to sanctions and fines. </s> Emmanuel Macron has fulfilled a key campaign promise to finally get France back into line with EU budget rules, after the European Commission recommended that the country’s “excessive deficit procedure” be closed.

The move reflects the fact that France’s deficit last year fell to 2.6 per cent, making it the first time in a decade that it was under the EU’s 3 per cent benchmark. It was a period marked by repeated failings of successive French governments to respect deadlines agreed with Brussels for bringing the deficit into line.

The commission’s announcement is a boost for Mr Macron, who has linked fixing the deficit with restoring France’s credibility as an equal partner to Germany in the EU.

The French president indicated last week that France’s moves to put its house in order had given it leverage in its efforts to negotiate euro zone reforms with Berlin.

Speaking in Sofia, Mr Macron said that “I expect a lot from the German response” to Paris’ euro reform proposals.

“France has proposed, France has reformed, France has waited. This coming summer is a moment of truth,” he said.

The last time France’s deficit was below the 3 per cent level was in 2007, before the collapse of Lehman Brothers and the start of the global financial crisis.

Brussels welcomed the improvement as a strong signal of the euro area’s economic recovery. The decision on France, once endorsed by national governments in the coming weeks, will mean that only one country, Spain, is left inside the excessive deficit procedure, compared with 24 countries in 2011.

Pierre Moscovici, the EU’s economy commissioner and a former French finance minister, said that France’s “deficit reduction path is strong and clear” and “is sustainable for 2018 and 2019.”

He said that the decision meant “the end of nine long years” of France’s excessive deficit procedure, during which “difficult and painful” steps had to be taken. – Copyright The Financial Times Limited 2018 </s> "The European Commission's proposal would markedly increase Germany's contribution to the budget… We are prepared to bear greater responsibility in order to strengthen the European Union — however, this also means that all member states must bear their fair share of the burden," German foreign and finance ministers, Heiko Mass and Olaf Scholz, said in a joint published statement.

READ MORE: Eurozone Growth Slows Down as EU Unveils Post-Brexit Budget Plan

Increasing allocations for such fields as research an innovation, digital economy and border management, the draft budget also proposes to cut the Common Agricultural Policy by about 5 percent, which immediately got negative reaction by France, a country that has been traditionally been one of the main recipients of EU funds as part of the union's Common Agricultural Policy.

On Wednesday, the European Commission proposed the EU long-term 2021-2027 budget worth 1,279 billion euro ($1,500 billion). The draft budget is now to be considered by the Council of the European Union with the consent of the European Parliament. </s> Budget commissioner Günther Oettinger is expected to propose a European Union long-term budget of €1.135 trillion in a bid to protect the bloc's spending powers after Brexit. But the BBC Brussels correspondent Adam Fleming warned the EU will face a "massive row" as member states prepare to put up a fight to keep contributions balanced. Speaking to BBC Radio 4's Today programme, Mr Fleming said:"They call it the Multi-Annual Financial Framework, the MFF, presumably to cover up the fact that it turns into a massive political row rather than it being a dry, technical, boring, technocratic process. "We expect the European Commission to publish a whole list of proposals about the size of the budget and priorities running from 2021 for seven years onwards.

"Of course there’s a Brexit-sized hole in it which the European Commission estimates could be between €10bn and €15bn per year." EU Commission boss Jean-Claude Juncker had previously warned member states to brace for cuts to "cohesion and agricultural spending". The EU's €145bn budget is currently spent on sectors where "it makes sense to pool resources" like transport and the environment. Frugal EU member nations however have mounted pressure on Brussels to rein in ambitious spending plans in a bid to plug the Brexit blackhole. Mr Fleming continued: "The European Commission has led lots of groundwork already they said they want a bigger budget overall and they want to focus on new challenges which could mean less money for French farmers and the Common Agricultural Policy.

"There is going to be a massive row because this is just an initial proposal from the European Commission: it ’s got to be agreed by the member states and by the European Parliament as well." He added: "There might be some big questions asked during this process. Should richer countries, who are net contributors, pay in more? "Should poorer countries who get money out of the budget receive less, or should there be new sources of revenues?" Brussels is also set to propose a huge 30 percent increase in the bloc's foreign aid budget between 2021 and 2027. The bloc’s Foreign Policy Chief Federica Mogherini is expected to propose an increase in the overall foreign aid budget to €123 billion (£108 billion) for the 2021-2027 period, from €95 billion for the 2014-2020 external financial budget. </s> PARIS, April 14 (Reuters) - Here are some of the key points in the programme of Emmanuel Macron, a centrist candidate in France's presidential election on April 23 and May 7.

Macron, a former investment banker running as an independent centrist, is favourite to win the unpredictable race in a May runoff.

Eye-catchers for voters include local housing tax exemptions worth 10 billion euros ($10.6 billion), reimbursement of the full cost of cultural shows, dentures and hearing aids, and cuts in social welfare levies for low earners coupled with tax breaks for their employers.

Flagship proposals involve the politically sensitive merger of myriad public- and private-sector retirement pension systems as well as a merger of unemployment benefit systems, which currently differ for regular wage-earners and the self-employed.

Broad financial targets include keeping France's budget deficit below the EU-mandated 3 percent of GDP, lowering the jobless rate to 7 percent by the end of his potential five-year term from around 10 percent now, an investment plan of 50 billion euros and public spending savings seen reaching 60 billion annually by the end of the mandate.

- Corporate tax would be cut from 33 to 25 percent.

- The CICE tax credit system for firms would be converted into permanent payroll tax breaks for low-wage workers.

- The 35-hour legal work week would remain but negotiation of real work hours would be left to company level.

- Low-wage earners would be exempted from certain social welfare levies, a measure that would put an extra month's wage per year in the employee's pocket.

Macron's plan calls for 50 billion euros of public investment over five years, of which:

- 15 billion on energy/environment targets: exit within 5 years from coal-based energy production, shift towards alternative, renewable energy sources, rise in carbon tax.

- 5 billion in farm sector financing for environment-friendly projects, local production cooperatives and aid during price crises.

- 5 billion for transport and local infrastructure, with a focus on renovating old train lines rather than building new ones.

- 5 billion euros on health sector, including better reimbursement of glasses, dentures and hearing aids, plus move away from wasteful medicine packages that contain more pills than a patient needs.

A target of 60 billion euros for savings on spending is so far more of a projection than a plan, premised on 10 billion euros of unemployment benefit savings generated by a drop in the jobless rate to 7 percent.

Macron also sees savings of 15 billion euros in public health spending due to greater efficiency.

Another 25 billion is predicted to come from public service modernisation, of which a small part would come from payroll cost falls due to a 120,000 cut in headcount, of which 50,000 will be in the central civil service.

The remaining 10 billion would come from cuts in local authorities spending, including a 70,000 reduction in headcount.

Build 15,000 extra prison places, hire 10,000 police, raise defence budget to 2 percent of GDP, from just under 1.8 percent in 2016. Introduction of on-the-spot fines for drug use and issue orders banning gang-leaders from certain neighbourhoods.

Halve number of early primary school pupils to 12 per class in 12,000 low-income zones, with teachers given a bonus of 3,000 euros a year to work in such areas.

All 18-year-olds to get a 500 euro "culture pass" to spend on cinema, theatre and concert tickets.

Mobile phone use to be banned on school premises for pupils aged up to about 15 years.

Strict application of secular policy in public life. No ban on Muslim veil for university students, as envisaged by some candidates.

State subsidy of 15,000 euros over 3 years for firms that hire people in 200 low-income neighbourhoods.

Reduce number of lawmakers by a third in both the Senate and National Assembly.

Reduce by at least a quarter the number of provincial local authorities.

Ban hiring of family-members as assistants of lawmakers.

Elected mandates limited to maximum three of same kind.
The European Commission recommends to remove France from the excessive deficit procedure which it entered in 2009.