• France's news in English
 
app_header_v3

France needs to plug €6 billion hole in coffers

AFP/The Local · 25 Feb 2013, 12:14

Published: 25 Feb 2013 12:14 GMT+01:00

The French government recently acknowledged that its forecast for 0.8-percent growth this year was out of reach, meaning its budget planning to reach the European Union deficit ceiling of 3.0 percent of output was no longer sufficient.

Budget Minister Jerome Cahuzac told Europe 1 radio that France's "budgetary situation is such that we have to find €6 billion in extra receipts."

But he did not specify how this would be achieved saying taxes "are already very high in France." French ministries have been informed how much to cut spending in order for the government to generate €2 billion in savings this year.

"Economies in public spending are inevitable," Cahuzac said. "We have started to do it, we will continue to do it," he added.

Benoît Coeure, a Frenchman who sits on the managing board of the European Central Bank, said on Monday that Paris had to take strong action to convince its European Union partners that it was serious about keeping to the EU's deficit norms.

French President François Hollande has rejected undertaking massive additional austerity measures, however, arguing they would only slow growth and further aggravate the country's finances.

"As for credibility on the short-term, France must absolutely respect its commitment to cut the structural deficit," Coeure told financial daily Les Echos.

"In the medium-term, it has to take quick and concrete decisions to achieve spending cuts, so that France reassures its European partners," he said.

Story continues below…

Coeure said that slashing expenditure was the best way out for France. France's public accounts court, which audits government spending and provides policy advice, has also urged the government to focus on spending cuts.

On Saturday, Hollande underscored the need for "economies in all budgets" of the state organs to allow for a balanced economy in 2017, saying that so far his government had put two thirds of the effort of budget correction on increased taxes but now the emphasis would have to switch to expenditure.

The European Commission has indicated that it may give France some slack in achieving the deficit target, and the IMF has recently warned EU countries that cutting deficits too fast was harming growth.

AFP/The Local (dan.macguill@thelocal.com)

Your comments about this article

Today's headlines
View from the rue
What do Parisians think of France's burqini bans?
Photo: AFP

With 64 percent of the French against burqinis at the beach, what do the Parisians think?

Almost half of France now on heatwave alert
Children cool off in Nice's fountains. Photo: AFP

Orange alerts - the second highest level - were issued to 43 départements as France's heatwave shows no signs of stopping.

France's top ten beaches to survive the heatwave
Photo: Gomezdegomera/Flickr

Temperatures are soaring... why not head to the beach?

Parisians invited to swim in the Bassin de la Villette
People taking part in activities in the Bassin de la Villette. Photo: AFP

If you fancy a rare chance to swim along the Paris canal system, here comes your chance.

French wine output drops 10 percent after stormy weather
A vineyard in Valfaunes partially destroyed after a violent hailstorm near the southern city of Montpellier. Photo: AFP

Bad weather has pushed wine production in France down ten percent this year.

Migrants armed with sticks hold up truck driver in Calais
Migrants standing near the Calais motorway. File photo: AFP

The driver involved says he deals with similar incidents "every night".

Majority in France against burqinis on beaches
The burqini ban in 30 French towns has provoked debate worldwide. Photo: AFP

Almost two thirds of French people said they're against the controversial swimwear.

Five tips for surviving an internship in France
Photo: Thomas Heylen/Flickr

A few things you need to know about interning in France.

Police arrest Lyon man who 'talked of attack plans'
French soldiers patrolling the Part-Dieu train station last year. Photo: AFP

The man had talked about plans to attack a busy district in central Lyon.

France's burqini ban goes before country's top court
A woman models the burqini swimsuit. Photo: AFP

France's highest administrative court will on Thursday examine a request to scrap a ban on the Islamic burqini swimsuit.

Sponsored Article
Five things Americans should know about voting abroad
National
Eight tips on buying wine in a French supermarket
Sponsored Article
5 reasons to try dating in Paris with The Inner Circle
Society
Here's how to enjoy Paris (while avoiding the heat)
Society
Ten mistakes to avoid when dating a Frenchman
Sponsored Article
Why you should attend an international job fair
Society
Twelve 'French' things that aren't actually French at all
Sponsored Article
Jordan: where history meets adventure
'World's priciest home' on sale in French Riviera for €1 billion
Lifestyle
RECIPE: How to make the tastiest ratatouille
National
Paris sees Europe's biggest plunge in 'liveability'
Sponsored Article
Why expats choose international health insurance
National
Life on the home front in rural France's 'war on terror'
Sponsored Article
Why you should attend an international job fair
Features
Weird facts you didn't know about the French language
Society
Paris foodie event cancelled over lack of security
Sponsored Article
Life in Jordan: 'Undiscovered treasure'
How to tackle six of the trickiest French verbs
Sponsored Article
Why expats choose international health insurance
National
Summer in France - 'the ideal time to find a job'
National
'Burqini bans will only divide France more'
Sponsored Article
Jordan Pass: your ticket to the experience of a lifetime
National
French vineyards revive horse-drawn ploughs
Sponsored Article
Why Jordan is the ‘Different’ East
French mayor bans Pokemon Go app from his village
Sponsored Article
6 reasons expats use TransferWise to send money
National
'To boycott France is to surrender to terrorists'
Sponsored Article
Life in Jordan: 'Undiscovered treasure'
Travel
21 photos to make you want to come to France right now
Society
This is how much the French are obsessed with cheese
National
French MP's call for Facebook ID cards blasted 'as idiotic'
Travel
Summer checklist: Fourteen great travel ideas for France
Travel
Here's why France is still world's top tourist destination
'Wealthy American tourists' snub France over terror fears
National
Where to go swimming in France (and where to avoid)
2,751
jobs available