French President Nicolas Sarkozy unveiled plans on Thursday to ensure that tackling the country's ballooning deficit was enshrined in the French constitution, bringing France closer to Germany's approach on state deficits. Sarkozy said he wanted French governments from now on to set out five-year plans to tackle the deficit as part of a constitutional reform. Similar to the United Kingdom, France is determined to keep its cherished AAA credit rating.
"This reform will oblige each government coming out of an election to engage in a five-year path dealing with the deficit," he told a conference, adding that governments would need to commit to a deadline for balancing public finances. Sarkozy's initiative comes as eurozone governments scramble to shore up confidence in their ability to bring public finances back under control after a boom in spending aimed at combating the credit crisis.
The EU has rules on budget discipline that allow it to take legal action against countries, but in practice many have flaunted the limits. Germany already has strict debt rules anchored in its own national constitution. "This is not setting out a 'golden rule' as in Germany but it's still a real engagement towards getting towards getting balanced public budgets," said Jean Arthuis, who heads up the French Senate's finance commission.
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