France plans €6-7bn of budget savings - Emirates24|7

France plans €6-7bn of budget savings

 

The French government is set to announce between €6-7 billion ($9.4-11 billion; Dh35-40 billion) of budget savings, Le Monde newspaper reported on Wednesday without citing its sources.

 

The newspaper said the cuts, in housing, health, employment and training budgets, would apply over a three-year period between 2009-2011, and that the details would be finalised by April 4. The Budget Ministry declined to comment.

 

The report comes the week after Paris reported a 2007 public deficit of 2.7 per cent of gross domestic product, compared with the 2.4 per cent it had promised its European Union partners.

 

President Nicolas Sarkozy's government also last week raised its 2008 public deficit projection to 2.5 per cent of GDP from 2.3 per cent previously as a slowdown in growth is expected to weigh on tax receipts.

 

Ministers are refusing to use the politically-charged phrase “budget rigour” in connection with the plan to reduce state spending but admit budget savings are needed.

 

"We are in a new period where the president and the prime minister want a precise, detailed analysis of spending by each of the ministries that will then lead to savings," Immigration Minister Brice Hortefeux, a close ally of Sarkozy, told reporters.

 

 

Economists are sceptical whether France can meet even its revised goals but are waiting to see the final package of savings measures before making a final judgement.

 

"Our (deficit) forecast remains 3.0 per cent for 2008 and 2009, as it assumed new measures to be announced," said Dominique Barbet, senior economist at BNP Paribas.

 

"It is only after the plan is detailed, later this week, that we will be able to judge whether our deficit forecast is still valid or whether it deserves to be revised down." (Reuters)

 
 
 
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