French president Francois Hollande stands at the entrance to the Elysee palace on January 22, 2014, in Paris. France is way behind targets for cleaning up its budget. Photo/FILE AFP
In Summary
- The public deficit, or gap between spending and revenues, amounted to 4.3 per cent of national output last year, the data revealed, raising the stakes as Hollande considers changing key ministers after an election debacle.
PARIS, Monday
France is way behind targets for cleaning up its budget, official data showed on Monday, deepening a dilemma for President François Hollande over cutting spending without splitting his left-wing backers.
The public deficit, or gap between spending and revenues, amounted to 4.3 per cent of national output last year, the data revealed, raising the stakes as Hollande considers changing key ministers after an election debacle.
The deficit figure from the national statistics office marked a sharp reduction from 4.9 per cent in 2012 but was clearly above the government’s target of 4.1 per cent.
Faces huge task
This means that the government faces a huge task, in economic and political terms, in meeting its commitment to the European Union to reduce the deficit to less than 3.0 per cent of gross domestic product in 2015.
Hollande, handicapped by weak economic growth and the failure of a promise to stop unemployment rising, suffered a huge setback on Sunday when his Socialist party did exceptionally badly in local elections, and the far-right National Front did well.
France has won extra time from the European Commission to correct its badly over-stretched public finances on condition it enacts big reforms.
France is the eurozone’s second-biggest economy, and its finances are closely watched by the EU, the European Central Bank, Germany — the zone’s biggest economy — and financial markets where France borrows.
Big trade deficit
The government is making little progress in enacting radical reforms to cut spending and raise business competitiveness, as have several other EU countries.
France has a big trade deficit compared to a huge surplus by Germany, and there is now broad agreement that taxes, and notably charges on businesses, are too high.
But in February the number of unemployed people rose by 0.9 per cent to a record 3.34 million.
France is way behind targets for cleaning up its budget, official data showed on Monday, deepening a dilemma for President François Hollande over cutting spending without splitting his left-wing backers.
The public deficit, or gap between spending and revenues, amounted to 4.3 per cent of national output last year, the data revealed, raising the stakes as Hollande considers changing key ministers after an election debacle.
The deficit figure from the national statistics office marked a sharp reduction from 4.9 per cent in 2012 but was clearly above the government’s target of 4.1 per cent.
Faces huge task
This means that the government faces a huge task, in economic and political terms, in meeting its commitment to the European Union to reduce the deficit to less than 3.0 per cent of gross domestic product in 2015.
Hollande, handicapped by weak economic growth and the failure of a promise to stop unemployment rising, suffered a huge setback on Sunday when his Socialist party did exceptionally badly in local elections, and the far-right National Front did well.
France has won extra time from the European Commission to correct its badly over-stretched public finances on condition it enacts big reforms.
France is the eurozone’s second-biggest economy, and its finances are closely watched by the EU, the European Central Bank, Germany — the zone’s biggest economy — and financial markets where France borrows.
Big trade deficit
The government is making little progress in enacting radical reforms to cut spending and raise business competitiveness, as have several other EU countries.
France has a big trade deficit compared to a huge surplus by Germany, and there is now broad agreement that taxes, and notably charges on businesses, are too high.
But in February the number of unemployed people rose by 0.9 per cent to a record 3.34 million.
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