While Germany has resolved its debt problem insofar as it no longer violates the European Union’s Stability and Growth Pact and can be expected to have a balanced budget in 2008, the forecasts for France imply deficits of 2.6% and 2.3% of GDP for this year and 2008. If the boom in the world economy falters, France will again violate the Stability and Growth Pact, as it did in 2002, 2003, and 2004.