• France's news in English
 
app_header_v3

France to cut spending for first time since 1958

AFP/The Local · 25 Jun 2013, 14:31

Published: 25 Jun 2013 14:31 GMT+02:00

French government spending will fall next year for the first time since 1958, Prime Minister Jean-Marc Ayrault said Tuesday, as the country begins shifting the austerity effort away from tax hikes.

"Every year since 1958, since the beginning of the Fifth Republic, state spending has increased," Ayrault said.

He spoke as he sent his ministries spending caps that will result in a cut of about €1.5 billion ($2.0) in central government spending in 2014 from the 2013 level.

"This is the first time that we will propose to Parliament such a reduction. It is a structural effort," he added.

The cut comes out to about 0.4 percent of planned 2013 central government spending of about €395 billion . So far French efforts to cut its budget deficit have been heavily weighted
towards tax hikes, but the country has long been advised to begin structural reforms to bring down unsustainable spending.

Of the 1.5 billion euros in cuts, 750 million will made from central government support to local governments and 750 million will be from ministerial budgets.

Ayrault said that the cuts would not be across the board, and that some ministries would see their budgets increase, without specifying any details.

However he indicated that the government's priorities remained job creation, education, housing, law and order, plus investments.

Last month France won additional time from Brussels to bring its public deficit back within the European Union's ceiling of 3.0 percent of output.

The overall public deficit includes spending by the central and local governments plus the social security system.

This year France should cut the public deficit to 3.9 percent of gross domestic product, then 3.6 percent in 2014 and 2.8 percent in 2015.

This task is being complicated by the fact that France's economy is now widely forecast to remain in recession this year, and that according to EU forecasts the deficit will climb next year.

Story continues below…

Opposition conservative lawmakers said that the recession this year is leading to lower tax revenues and calculate the deficit for the central government could come in some 20 billion euros more than planned.

Government officials acknowledged that tax receipts were coming in lower than had been forecast, but said the calculations did not take into account reduced spending.

Data from France's Insee statistical agency on Tuesday showed that the business climate in the manufacturing has continued to improve in June.

Insee's industrial economic climate index, based on survey of business managers, rose by one point from the previous month to 93 in June. The reading is still considerably below the long-term average of 100 points.

AFP/The Local (ben.mcpartland@thelocal.com)

Your comments about this article

Today's headlines
€5 to the coast? Ouibus rolls out new summer lines
Photo: Ouibus

Fancy heading to the coast for just €5 this summer?

Brexit
When France 'ignored' the result of an EU referendum
Demonstrators hold signs reading 'Respect our No, an other Europe is possible' after the EU constitution which was rejected in a referendum in 2005. Photo: AFP

The UK has voted to Leave the EU... but can the Brexit vote simply be ignored? Here's what happened in France's own EU referendum 11 years ago.

Tensions mount as thousands protest France's labour laws
French anti-riot police officers hold a man during a demonstration against controversial labour reforms, on June 28, 2016 on Bastille Square in Paris. Photo: AFP

Police are on high alert as tensions have begun to service during the latest labour reform protest in Paris.

The bright side of Brexit: The 'good news' for Brits in France
Photo: AFP

Well the UK voted to Leave the EU, the pound is tumbling, and stock markets have been in turmoil, but it's not all bad news for Brits living and working in France... right?

New map of France finalized as regions settle on names
Photo: AFP

It's done. The names have all been decided on after lots of arguing. Here's the new map of France.

Eiffel Tower closes as workers join latest strike
Photo: AFP

The Iron Lady is on strike on Tuesday.

Labour law protests
Paris: 2,500 police on alert for new labour law protest
Police carry out bag checks at Thursday's protest. Photo: AFP

Paris is on high alert on Tuesday as the city is set to play host to the 11th demonstration against new labour reform bill, which will be voted on by the Senate on the same day.

French police lifeguards get guns for summer beach patrol
Photo: AFP

Keep an eye out for life guards with guns on beaches in France this summer.

What will change in France from July 2016
Photo: Fred Dufour/AFP

July will see some changes in France, and here's how you'll be affected.

France tells UK to hurry up and get on with EU divorce
Photo: AFP

"Don't waste any time," France tells UK. "We don't want anymore uncertainty."

Sponsored Article
Why you should attend an international job fair
National
Mixed reaction from the French as UK votes for Brexit
National
How Brexit could now scupper that dream move to France
Brexit limbo: What happens next for Brits in France?
Gallery
Ten reasons why you should think about becoming French
Sponsored Article
Education abroad: How to find an international school
Analysis & Opinion
Brexit: Life for Brits in France 'will get more complicated'
Culture
20 English words that 'should be banished' from French
National
Best Briehaviour: A guide to French cheese etiquette
Features
And the best city in France for expats to live in is...?
Sponsored Article
Why Swiss hospitality graduates are in demand
Society
Forget bikes, Paris is set to roll out scooter rentals
National
'We fear for our safety': French police feel the strain
Lifestyle
Why Rennes (and not Paris) is the best city in France for expats to live
Sponsored Article
Avoid hidden fees when sending money overseas
National
Why are the French losing appetite for baguettes?
Lifestyle
Naturism booms in France as young eager to ditch clothes
Lifestyle
Is working life better in London or Paris?
National
Dear Americans: Please come to Paris
National
It's official (kind of): French work fewest hours in EU
And the best football fans of Euro 2016 in France are?
National
Paris has wettest spring in 100 years and it's hitting morale
Police murders remind France of complexity of terror threat
National
IN PICTURES: Labour law protests in Paris turn ugly
National
Double murder just latest jihadist attack on French police and soldiers
International
French police appear unprepared for hooligan threat at Euro 2016
Sport
An A to Z guide of what to expect in France for Euro 2016
2,738
jobs available