BRUSSELS, Sept 26: The European Commission said on Wednesday it was keeping a close eye on French public finances to avoid “slippage,” after President Nicolas Sarkozy’s government unveiled its first budget.

EU Monetary Affairs Commissioner Joaquin Almunia is in “regular contact” with the French government on the issue, his spokeswoman told reporters in Brussels.

“The surveillance of French public finances and those of other Union countries, in particular those which have not achieved the balance that is called for, is necessary to stop slippage,” said spokeswoman Amelia Torres.

She said it was too early to comment on the 2008 national budget presented by the French government, which foresees only a marginal reduction in the budget deficit, from 2.4pc of GDP this year to 2.3 per cent next year.

France has long been one of the remedial students in the European school of fiscal discipline.—AFP