France, the eurozone’s second biggest economy, appeared as the weakest performer in European Commission economic forecasts yesterday with below average economic growth, falling investment and deteriorating public finances and competitiveness.

Economic growth in the third biggest economy, Italy, emerging from recession, would be even slower over the next two years than in France, the Commission forecast but it would invest more, cut its budget deficit and debt and keep a current account surplus.

Both countries clashed with the European Union’s executive arm last month when they sent in for approval their draft 2015 budget plans that fell well short of their consolidation obligations under EU budget rules.

Both France and Italy have argued that a more forceful consolidation of public finances would hit their already weak growth rates

To avoid the political humiliation of an outright rejection of the drafts by the Commission, both Paris and Rome agreed to small changes in the plans, but the promised adjustments came too late to be included in the forecast yesterday.

Rather than fall, like virtually everywhere else in the eurozone, the French headline budget deficit is to grow steadily to 4.7 per cent of gross domestic product in 2016 from 4.1 per cent in 2013, the Commission forecast.

France has a deadline for next year to bring the deficit down to below 3 per cent, but has already said it would not make it until 2017, setting itself up for tougher disciplinary EU action, which might include fines for missing deadlines.

In structural terms, which strip out the effects of the business cycle and one-off revenues and spending, the French deficit is to be 3 per cent this year, 2.9 per cent in 2015 and jump up again to 3.4 per cent in 2016, unless action is taken, the Commission said.

This is also against EU rules, which require a government to cut its structural deficit by at least 0.5 per cent of GDP every year until it reaches balance or surplus. The Commission expects Italy to keep its headline deficit below the EU ceiling of 3 per cent of GDP next year and reduce it to 2.2 per cent in 2016.

Both France and Italy have argued that a more forceful consolidation of public finances would hit their already weak growth rates – the Commission projects that the French economy would grow only 0.3 per cent in 2014, 0.7 per cent in 2015 and 1.5 per cent in 2016.