France Will Reduce Deficit To Within EU Targets in 2017

The French government has said it will reduce its budget deficit to below the EU threshold of 3% of GDP by 2017, two years later than promised.

The new forecast indicates the public deficit will fall to 4.3% next year, but to 2.8% by 2017.

It was released as Finance Minister Michel Sapin prepared to present his annual budget to cabinet.

Mr Sapin said growth would remain weak, projecting that the economy would only grow very slightly this year.

“We have taken the decision to adapt the pace of deficit reduction to the economic situation of the country,” he told a news conference.

“Our economic policy is not changing, but the deficit will be reduced more slowly than planned because of economic circumstances – very weak growth and very weak inflation.”

The French government is hoping to boost growth by cutting taxes, although this will have to be financed by further spending reductions.

France plans to cut public spending by €50bn ($63bn; £39bn) by 2017, the year in which the country’s next presidential election will be held.

The country has missed a number of budget deficit targets and has struggled with high unemployment and low growth.

via BBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza