Weidmann warns France of falling behind deficit goals

Germany`s Federal Reserve Bundesbank President Jens Weidmann called France to take deficit cut rules more seriously to shave budget deficits, signaling it has "special" obligations in the euro area.

In an interview with the Bild newspaper published Sunday, Weidmann indicated that countries like France must not risk the credibility of the new euro-zone rules, though it involves a "certain amount of flexibility."

"The credibility of the new rules certainly won`t be enhanced if one were to exhaust and use up to a maximum the flexibility right at the start," Bundesbank chief told the newspaper.

However, the Bundesbank "definitely cannot allow the expectation to rise that at the end of the day the monetary policy will be able to resolve the problems," Weidmann added.

Weidmann is now the second official in a month to warn France of its obligation to cut its budget deficit to 3 percent of Gross Domestic Product, even if it takes two extra years.

Jeroen Dijsselbloem, who heads the Eurogroup, pointed out two weeks ago that France has to "push forward their reforms" after the country has been given two more years to reach its deficit goals.

The European Commission agreed last week to grant France two more years to cut its deficit below 3 percent target because of the country`s "weaker than expected" economic developments.

France fell short of its budget deficit goals last year, official data showed on April 22. France`s 2012 budget deficit was 48 percent of national output.