PARIS: France said yesterday over €4bn ($5.4bn) of extra savings this year would help it bring down its public deficit to 3.8 percent of GDP and move towards an EU-set target.
Finance Minister Michel Sapin laid out planned modifications to this year’s finance bill, saying the government would make additional cuts of €1.6bn in state spending and €1.1bn in social welfare. State spending on debt interest this year would also be €1.8bn less than previously envisaged, according to the document presented to cabinet.
France, the European Union’s second-biggest economy, is struggling to reduce its public deficit and meet the EU target of three percent. Under EU rules, budget deficits —the shortfall between government income and spending — should not be more than 3 percent of annual GDP.
Paris has promised €50bn of spending cuts and reforms to get back in the EU’s good graces, but the Commission has said that while the country was on the right track, these measures were not enough. France has nevertheless promised to meet the EU requirement by next year but Brussels has forecast a figure of 3.4 percent.
The country already missed its previous deficit forecast of 4.1 percent in 2013 and had to revise up its target for 2014 from 3.6 percent to 3.8 percent.
Sapin has also forecast growth of 1 percent in France this year.
AFP
