France: EU cannot dictate after call for quick reforms

French President Francois Hollande on Wednesday said the European Commission could not "dictate" orders after it called on Paris to step up reforms and rehaul its costly pension system. "The European Commission cannot dictate to us what we have to do. It can simply say that France must balance its public accounts," he said. "As far as structural reforms are concerned, especially pension reforms, it is up to us alone to say which is the best path to attain this objective," he said, adding that talks on the subject were ongoing with social partners to achieve this with "consensus, justice and responsibility." The Commission gave France, the eurozone's second largest economy, more time to trim its deficit to get back on track but urged haste. In France, measures should be taken "by the end of this year to reform the pension system and ensure it is in equilibrium by not later than 2020," the Commission said. As an ageing population adds to the pressure, Paris will have to adjust pension payments, the retirement age -- already on the rise -- and generally reduce the system's overall costs, all at the same time as not increasing the burden on employers. Given an additional two years to put its fiscal house in order, such pension and labour market reforms must get France from an expected budget deficit of 3.9 percent this year to 3.6 percent in 2014 and 2.8 percent in 2015, it said. Current estimates put the deficit -- the shortfall between government revenue and spending -- at 3.9 percent this year and 4.2 percent next, with the economy set to shrink 0.1 percent in 2013.