France risks budget deficit targets, says auditor

Tuesday, February 11, 2014

France´s state auditor warns that France runs a 'significant risk' of overshooting its budget deficit target for this year and must cut further on spending.

France´s state auditor warns that France runs a 'significant risk' of overshooting its budget deficit target for this year and must cut further on spending.

PARIS - France´s state auditor warned on Tuesday that France runs a "significant risk" of overshooting its budget deficit target for this year and must cut further on spending.

The Court of Auditors, the government body charged with conducting financial and legislative audits, noted that France´s public deficit would surpass 3.6 percent of its gross domestic product this year.

According to the Organization for Economic Cooperation and Development, among the major euro zone economies, only Germany is currently on track to meet the EU budget target, with a deficit of only 0.2 percent of gross domestic product (GDP) forecast for this year.

France´s public debt is set to rise to 89.1 percent of gross domestic product this year.

The Court of Account of France has warned many times in recent months that France must reform urgently to control its public finances. But the government under the control of Socialist President Francois Hollande, faces domestic strains in making further deep cuts in spending to help businesses and reduce unemployment.

According to the European Union single currency criteria, set out in the Treaty of Maastricht, a national budget deficit must be at or below 3 percent of GDP. However, France has a 4.1 percent deficit in the last year despite some austerity measures taken by the government such as the expenditure cuts of a further 50 billion euros until 2017.

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