Despite the hesitant start, the economy will hence eventually gain full speed. Whereas the economic signals are green, all warning lights in the budgetary area in Europe are flashing bright red. Three countries have already crashed the red light, with a deficit exceeding the 3% ceiling under the Maastricht Treaty.
France will do this next year for the third year in succession, and should hence be penalised. The penalty for France could reach 0.3% of GDP, representing more than EUR 4 billion. However, this fine need only be paid if France fails to narrow its deficit to below the 3% ceiling within two years. So France would have to break the rules until end-2006.