Skip to main content
France

France to cut government spending for first time since 1958, Ayrault

French government spending will fall next year for the first time since 1958, Prime Minister Jean-Marc Ayrault declared on Tuesday.

Prime Minister Jean-Marc Ayrault
Prime Minister Jean-Marc Ayrault Reuters/Philippe Wojazer
Advertising

The move is intended to help cut the country’s debt, complementing the tax hikes already announced.

"Every year since 1958 …. state spending has increased," Ayrault said.

Most ministries have been given spending caps which should result in a cut of about 1.5 billion euros in central government spending in 2014 compared to the 2013 level.

The cut comes out to about 0.4 percent of planned 2013 central government spending of about 395 billion euros.

So far French efforts to cut the budget deficit have been heavily weighted towards tax hikes, but the country has long been advised to begin structural reforms to reduce unsustainable levels of spending.

Ayrault said that the cuts would not be across the board, and that some ministries would see their budgets increase, though he did not give details.

However, he indicated that the government's priorities remained job creation, education, housing, law and order, as well as investments.

Last month France won additional time from Brussels to bring its public deficit back within the European Union's ceiling of 3.0 percent of output.

The overall public deficit includes spending by the central and local governments plus the social security system.

This year France should cut the public deficit to 3.9 percent of gross domestic product, then 3.6 percent in 2014 and 2.8 percent in 2015.

This task is being complicated by the fact that France's economy is now widely forecast to remain in recession this year, and that according to EU forecasts, the deficit will climb next year.

Opposition conservative lawmakers said that the recession this year is leading to lower tax revenues and they calculate that the deficit for the central government could come in some 20 billion euros more than planned.

Government officials acknowledged that tax receipts were coming in lower than had been forecast, but said the calculations did not take into account reduced spending.
 

Daily newsletterReceive essential international news every morning

Keep up to date with international news by downloading the RFI app

Share :
Page not found

The content you requested does not exist or is not available anymore.