French budget shows 'responsibility, prudence'

French Finance Minister Moscovici (L) and EU Economic Monetary Affairs Commissioner Rehn The French budget for 2014 shows "responsiblity and prudence" the EU's Economic Affairs Commissioner Olli Rehn said Thursday as he urged France to press on with reforms. France on Wednesday vowed "unprecedented" cuts in public spending to rein in its deficit and French Finance Minster Pierre Moscovici came to Brussels to present the draft 2014 budget to the Commission, which has been highly critical of how Paris has been handling its economy.
Growth targets for France, which faces soaring public debt levels, are "slightly above ours, but appear plausible," Rehn said at a joint news conference with Moscovici.
But Rehn noted that the budget is now forecast to bring in a public deficit of 4.1 percent of gross domestic product, beyond the agreed target of 3.9 percent.
He said however that the Commission would judge France on structural efforts made to fight overspending when it evaluates the country's economic performance in November.
In order to assuage criticism by Brussels, some 80 percent of public savings next year will come from cuts in spending, far more than among France's main European partners, and only 20 percent from a rise in taxes.
Public debt is set to reach a record 95.1 percent of GDP in 2014 -- far higher than previous government estimates -- before falling back again the following year.
Moscovici reiterated a pledge that France's public deficit would gradually drop, meeting the 2015 EU-mandated deadline to bring it below three percent.
These targets are all based on predictions by France of 0.9 percent economic growth next year and 0.1 percent in 2013 -- compared to zero growth in 2012.
The budget came the same day as new figures showed the number of registered job seekers in France falling for the first time in more than two years.
Source: AFP