Saturday

30th Apr 2016

France plans budget cuts in 2014

  • French President Francois Hollande is under pressure to deliver on promised budget cuts (Photo: consilium.europa.eu)

France is to cut its budget next year for the first time in over five decades in a bid to meet an EU deadline on deficit reduction.

"This is the first time that we will propose such a reduction in parliament. It is a structural effort," French Prime Minister Jean-Marc Ayrault said Tuesday (25 June) when presenting a planned cut of €1.5 billion to the almost €400 billion to be spent next year by the government.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

Ayrault said state spending has increased continuously since the beginning of the Fifth Republic, in 1958.

Half of the budget cuts will hit ministerial budgets while the other half will target support to local governments.

France is under pressure from the EU, Germany and the International Monetary Fund to deliver on promises to reform its economy and bring its deficit in line with EU rules.

But French President Francois Hollande was granted extra time to reduce the budget deficit, which has to fall below 3 percent of the country's economic output by 2015.

The government aims to reach a deficit of 3.7 percent of GDP this year, but the financial committee of the French Parliament on Tuesday poured cold water on these projections, warning that the real deficit may rise to four percent as the economy is still in recession and tax revenues weaker than expected, Le Figaro reported.

Finance minister Pierre Moscovici downplayed the warning.

"Public spending was under control in 2012 and will be under control in 2013," Moscovici told French radio RTL. Any adjustments to the forecast - if needed - would only be made in a few months, he added.

The French economy is contracting by 0.2 percent and will only rebound at the end of the year, the IMF said earlier this month.

Hollande, the most unpopular president in decades, has failed to deliver on his promise of 0.1 percent growth on which he campaigned before being elected last year.

Investigation

VW will not publish emissions cheat report

Volkswagen said it would keep its preliminary report into the emissions scandal secret because publishing it would “present an unacceptable risk” to the firm.

News in Brief

  1. Netherlands funds €1.3mn Russian media project
  2. Fake euros network dismantled in Bulgaria
  3. Inflation negative in eurozone in April
  4. EU economy registers 0.5% growth in first quarter
  5. Eurovision says No to Kosovo, Palestine, IS flags
  6. EU to decide on future of tobacco agreement 'soon'
  7. Russia blames Sweden for frosty relations
  8. UN chief warns of 'growing xenophobia' in Europe

Stakeholders' Highlights

  1. European Roundtable of IndustrialistsDigitising European Industry
  2. Counter BalanceParliament Gets Tough on Control EU Bank's Funds
  3. ICRCSyria: Aleppo on the Brink of Humanitarian Disaster
  4. CESIWorld Day For Health and Safety at Work: Public Sector Workers in The Focus
  5. EFABasque Peace Process-Arnaldo Otegi Visits the European Parliament
  6. EscardioChina Pays Price of Western Lifestyle With Soaring Childhood Obesity
  7. Centre Maurits CoppetiersThe Existence of a State is a Question of Fact, Not a Question of Law
  8. Martens CentreJoin Us at The Event: Prospects For EU Enlargement After 2019
  9. ICRCSyria: Aid for Over 120,000 People Arrives in Besieged Town Near Homs
  10. Counter BalanceHighway to Hell: European Money Fuelling Controversial Infrastructure Projects
  11. EPSUResponds To Reported €300 Million McDonald’s Tax Bill in France
  12. Access NowAcademics and Privacy Groups Ask Obama to Reject Anti-encryption Law

Latest News

  1. EU fiscal rules, migrants and Belgium's trick
  2. EU should call out Bangladesh on workers' rights
  3. Kosovo: Living in a ghetto on the EU fringe
  4. War crimes law poisons Serbia accession talks
  5. Italy and Austria try to calm tensions on Alpine pass
  6. French MPs call to lift Russia sanctions
  7. EU sides with embattled Greek PM in bailout talks
  8. Former EU commissioners to testify in emissions probe