European Union grants France two year deficit extension

German Finance Minister Wolfgang Schaeuble (L) and Finnish Finance Minister Antti Rinne at the start of an ECOFIN: European finance ministers meeting at EU Council headquarters, in Brussels, Belgium, Image copyright EPA
Image caption The announcement came during a meeting of European Union finance ministers in Brussels

European Union finance ministers have granted France an extra two years to bring its budget deficit below 3% of GDP, as mandated by EU regulations.

The move, which was widely expected, is the third extension France has been granted since 2009.

France's budget deficit is expected to be 4.1% of GDP this year, as it struggles with high unemployment.

Critics have warned that the extensions undermine the EU's market credibility.

In a statement announcing the extension, the ministers found "that extending the deadline for correcting the deficit was justified by the fiscal effort made by France since 2013, and by the current weak economic conditions and other factors."

However, they called for "additional fiscal effort" by the end of April 2015 involving additional structural measures that would allow it to reduce its deficit by 0.2% of GDP.

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