France risks missing budget targets - national auditors

Tuesday 11 February 2014 09.59
France's national auditors warning on budget deficit targets
France's national auditors warning on budget deficit targets

France runs a "significant risk" of overshooting its budget deficit target for 2013 and must do more to cut spending, national auditors warned today.

The public accounts court also warned that France was at risk of overshooting its target of reducing the public deficit to 3.6% of gross domestic product this year.

For 2013, the country could turn out to have a public budget deficit above the government's target of 4.1% of output.

France is EU's second-largest economy and the state of its finances and efforts to turn around its anaemic economy are closely watched across the bloc, in particular in its economic powerhouse Germany.

The president of France's highly influential public accounts court, Didier Migaud, said in a speech on its annual report that efforts to cut public spending had to be "pursued and increased in the next three years."

The report from the court, which each year gives an overall assessment of the state of public finances and also highlights selected cases of mismanagement and waste, comes just as the government begins work on how to cut a further €50 billion from spending in the next three years.

This is the key factor in a change of policy by Socialist President Francois Hollande, currently on a state visit to the US, to finance a promised cut in taxes and charges on businesses to help them regain competitiveness on world markets.

France has won extra time from the European Commission to get its public deficit within the permitted ceiling of 3% of GDP. But the government faces internal strains in making further deep cuts in spending to help businesses and reduce unemployment. 

The accounting court has made a number of statements in recent months warning that France must reform quickly to strengthen its public finances.