FRANCE yesterday came under fresh pressure from its EU partners over its failure to curb a worse-than-expected public deficit this year.
One EU finance minister warned that France should not expect automatic entry to Economic and Monetary Union (EMU) on political grounds alongside Germany.
Spain and Portugal, which were making better progress on fiscal discipline, could provide the "southern" balance in the planned monetary union, he said.
The French deficit is set to reach between 3.5 and 3.8 per cent of gross domestic product this year, according to the latest French finance ministry projections.
The 1992 Maastricht Treaty sets out a deficit target of 3 per cent of GDP in 1997 for countries wishing to enter EMU.
The new projections emerged as EU leaders in Amsterdam laboured over a new treaty to prepare the EU for enlargement to central and eastern Europe.
With Germany in the forefront, other EU countries committed to EMU are pressing the new left-wing government in Paris to clarify whether it intends to order fresh austerity measures in a good-faith effort to meet the Maastricht criteria.
Doubts over France's commitment to a common currency have risen since the Socialists swept to a surprise victory in parliamentary elections earlier this month. Yesterday members of the new government sent conflicting signals about policy toward EMU. Mr Pierre Moscovici, the European Affairs Minister, suggested that a French move to the euro was not automatic.
Estimates that the French deficit could be near 4 per cent underline the fact that Paris has made no real improvement in redressing its deficit this year compared with last, once the one-off pension-related payment from France Telecom is considered.
The finance ministry said the budget deficit for the first four months was 208.8 billion French francs (£23.58 bn).