Tags: france | deficit | exceed | target

Hollande: French Deficit Could Slightly Exceed Target

Friday, 28 June 2013 04:14 AM

BRUSSELS/PARIS — France's fiscal deficit could slightly go over target due to poor growth and dwindling tax revenues, President Francois Hollande said on Friday, while stressing his commitment to containing public spending.

The Cour des Comptes — a quasi-judicial body that oversees public accounts — warned in its annual review on Thursday that sickly growth would leave France's 2013 public deficit closer to 4 percent of economic output than the government's target of 3.7 percent.

The warning echoed concerns in Brussels that trimming budgets is not enough to restore the finances of the eurozone's second-largest economy and that structural reforms are needed in a country where public spending sucks up around 57 percent of GDP, among the highest levels in the region.

Hollande told reporters on the sidelines of an European Union summit in Brussels that if growth remained as weak as it currently was, the 3.7 percent deficit target would be difficult to meet.

"There is a risk that we will have less revenue than expected," Hollande said, adding that this would result in "a little more deficit" at the end of the year.

"What do we have to do given this perspective? First, everything possible for there to be more growth in the second half of the year," Hollande said.

"But what France must do for 2013 is contain public spending. Spending in 2013 must be strictly equal to 2012 spending," he added.

The Socialist government aims to slash public spending by 13 billion euros ($16.90 billion) in 2014 and 15 billion in 2015 by making nips and tucks in government ministries, cutting state aid to companies and reducing local government budgets.

But with the economy back in a shallow recession, jobless claims at an all-time high and personal approval ratings around 30 percent, Hollande has been reluctant to accelerate the pace of spending cuts.

He told Brussels this month that he will go at his own pace with reforms and will not be dictated to.

Budget Minister Bernard Cazeneuve told radio station RFI the government was not planning on changing its 2013 budget. He said such a move would only push the country deeper into recession.

France will not raise taxes any further, Hollande said.

Figures released on Friday showed that France's public debt rose by 36.5 billion euros in the first quarter to reach 1.87 trillion euros, or 91.7 percent of GDP.

© 2021 Thomson/Reuters. All rights reserved.


   
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France's fiscal deficit could slightly go over target due to poor growth and dwindling tax revenues, President Francois Hollande said on Friday, while stressing his commitment to containing public spending.
france,deficit,exceed,target
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2013-14-28
Friday, 28 June 2013 04:14 AM
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