France pressured to cut spending
(02-25 19:37)
France needs an extra 6.0 billion euros in revenues next year, the budget minister said on Monday, and the European Central Bank said it had to act fast to cut spending and retain credibility after slashing the 2013 growth forecast.
The French government recently acknowledged that its forecast for 0.8-percent growth this year was out of reach, meaning its budget planning to reach the European Union deficit ceiling of 3.0 percent of output was no longer sufficient, AFP reports.
Budget Minister Jerome Cahuzac told the private Europe 1 radio station that France's "budgetary situation is such that we have to find six billion euros in extra receipts.''
But he did not specify how this would be achieved saying taxes "are already very high in France.''
French ministries have been informed how much to cut spending in order for the government to generate 2.0 billion euros in savings this year.
"Economies in public spending are inevitable,'' Cahuzac said. "We have started to do it, we will continue to do it,'' he added.
Benoit Coeure, a Frenchman who sits on the managing board of the European Central Bank, said on Monday that Paris had to take strong action to convince its European Union partners that it was serious about keeping to the EU's deficit norms.
French President Francois Hollande has rejected undertaking massive additional austerity measures, however, arguing they would only slow growth and further aggravate the country's finances.
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