European Union won't reject French, Italian budgets, reports indicate

The European Union (EU) will not reject the budget plans of France and Italy, according to reports.

That comes after French finance minister Michel Sapin moved to block such a possibility on Monday.

Sapin sent a letter to EU commissioner Jyrki Katainen responding to the European Commission’s initial request for more details on his country’s budget for 2015.

In the missive he argued that revised interest rate assumptions, lower contributions to the European budget, new measures to fight against tax fraud and fiscal optimisation supported by both socialist and right wing MPs would allow France to comply with the 0.5% structural budget effort rule.

French daily Le Figaro reported that Paris’s red ink would thus be €3.6bn to €3.7bn lower than initially expected.

In nominal terms however the budget deficit would stay above 4%.

A response from the EU's executive arm was expected this evening.