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France to save €4b more to appease Brussels

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France to save €4b more to appease Brussels
The French finance ministry which must make further savings. Photo: AFP
16:45 CET+01:00
France's president has revealed plans to find €4 billion in a new "savings package", to meet demands from Brussels. The move will also please German Chancellor Angela Merkel who noted that France was "on the right track".
"If Brussels asks for four billion more to respect our obligations in reducing the public deficit, it will be found with new savings," said Hollande in an interview with daily Le Parisien.
   
The European Commission last week gave France two years to bring its deficit under the limit of three percent of GDP, but set strict levels that must be achieved along the way.
   
It ruled that France's budget for 2015 would not be enough to achieve a reduction of 0.5 percentage points in the deficit this year, and demanded a further four billion in savings.
   
On Wednesday European Commission President Jean-Claude Juncker told Spanish daily El Pais that while Paris had undertaken spending cuts and structural reforms, those "have not been ambitious enough."
   
He also noted that France could yet be fined if it fails to continue reforming and reigning in its deficit.
   
"I'm sure the French government has understood that penalties remain a possibility," Juncker said, adding France "knows it must do better, and it will."
   
In his interview, Hollande promised "there will be no tax rises in 2015, 2016 and 2017" and that the process of lowering charges for businesses would continue.
   
He also criticised tax avoidance efforts by large business groups, such as Total.
   
"Total, which is the biggest French group, should be the biggest French contributor," he said.
 
German Chancellor Angela Merkel noted that France seemed to be going in the right direction. 
   
"I think France is very much on the right track," she said.
 
"We are going to be working very closely with France in support of these efforts."
 
Paris will also have to submit regular progress reports as Brussels exercises its new powers to oversee member state budgets.
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