© Reuters. FILE PHOTO: French Minister for Economy, Finance, Industry and Digital Security Bruno Le Maire leaves following the weekly cabinet meeting at the Elysee Palace in Paris, France, November 8, 2023. REUTERS/Claudia Greco/File photo
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PARIS (Reuters) -France and Germany have reached a “100 percent” agreement on how to reform the European Union’s fiscal rules, French Finance Minister Bruno Le Maire said on Tuesday after talks with his German counterpart concluded.
The EU’s two largest countries have been at odds over how to sustain investment when budget deficits exceed the EU limit. Other member states, roughly rallying in two camps behind Paris and Berlin, are wrangling over other issues.
Le Maire and German Finance Minister Christian Lindner had wanted to agree a joint Franco-German position before a broader meeting with their EU counterparts on Wednesday, probably the last chance to reach a deal before the end of the year.
“We have this evening reached a 100% agreement with (Christian Lindner) on the new rules for the Stability and Growth Pact,” Le Maire said in a post on X after talks in Paris.
He added that the deal, coming after months of negotiations, was “excellent news for Europe, ensuring healthy public finances and investment”.
Lindner said in a post on X that they were in agreement on the “key elements” of the EU’s budget rules, citing in particular “safeguards for lower deficits and debt-levels, incentives for reforms and investments”.
Paris and Berlin had been at loggerheads over how quickly a country with a deficit above the EU limit of 3% of GDP should cut it, while at the same time having enough money to invest and reform.
France, which does not expect bring its deficit in line with the 3% threshold before 2027, wants a slower pace to retain more funds for investment, while Germany wants a faster reduction.
