French public deficit 'to exceed 3.7% target'

Finance Minister Pierre Moscovici confirmed Tuesday that France's public deficit will be higher than the target of 3.7 percent of gross domestic product. "Yes, it will be higher than 3.7 percent" of gross domestic product (GDP), Moscovici said on RMC radio. "We did not want to put in place an austerity plan in a situation of weak growth: in other words the public deficit will be a little higher than expected." He noted that the European Commission had forecast a deficit of between 3.7 and 3.9 percent of GDP this year. In May, reflecting a recent policy switch to better adjust the effort required to economic performance, the European Commission gave France an additional two years to bring its public deficit back under the EU ceiling of 3.0 percent of GDP. It said France should cut the public deficit from 4.8 percent of GDP in 2012 to 3.9 percent in 2013, then 3.6 percent in 2014 and 2.8 percent in 2015. The French government, however, kept to its forecast of 3.7 percent. Moscovici expressed confidence "the deficit will drop in 2014 compared to 2013 on a trajectory which will allow us to get under 3 percent in 2015."