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BUDGET

French government hails cut in public deficit

France's Socialist government on Thursday was cheered by the news the country's public deficit had been cut. Paris is under pressure from Brussels to bring its public finances under control.

French government hails cut in public deficit
Photo: AFP

France's public deficit in 2014 stood at 4.0 percent of gross domestic product, instead of the 4.4 percent estimated previously, the national statistics agency said on Thursday.

Finance Minister Michel Sapin hailed the unexpected figures, saying they raised the possibility the public deficit in 2015 could stand at 3.8 percent of GDP instead of the 4.1 percent currently estimated.

The 2013 public deficit in France, the eurozone's second-largest economy, stood at 4.1 percent of GDP.

Under European Union rules, members' public deficits — the difference between government spending and revenue — cannot exceed 3.0 percent of economic output.

France has repeatedly been above this figure and earlier in March won a two-year reprieve to get its public deficit within the bloc's limits.

Under the controversial decision — which came amid accusations that bigger EU member states are treated more leniently than smaller ones — France got until 2017 to work down its public deficit to 2.8 percent.

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BUDGET

Paris, Berlin agree on future eurozone budget: French ministry source

France and Germany have agreed on the broad outlines of a proposed eurozone budget which they will present to EU finance ministers in Brussels on Monday, a French finance ministry source said.

Paris, Berlin agree on future eurozone budget: French ministry source
French Economy and Finance Minister Bruno Le Maire (R) and German Finance Minister and Vice-Chancellor Olaf Scholz. File photo: AFP

The common single-currency budget was one of French President Emmanuel Macron's key ideas for protecting the euro, but it caused differences between France and Germany, the region's two largest economies.

French Finance Minister Bruno Le Maire and Germany's minister, Olaf Scholz, will “jointly present a proposition on Monday… about the layout for a budget for the eurozone,” the ministry source told AFP.

“It's a major step forward,” the source said. “We will look forward to sharing with other members.”

The source said the amount of the budget has not been established as the proposal was to first set out the “architecture and main principles” of the budget.

According to a copy of the French-German proposal, the budget would be part of the EU budget structure and governed by the 19 euro members.

Macron will travel to Berlin at the weekend to meet with German Chancellor Angela Merkel where the two leaders will bolster their alliance as champions of a united Europe.

READ ALSO: France and Germany push for compromise on eurozone reform

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