Brussels, 23/04/2014 (Agence Europe) - On Wednesday 23 April, the French government revealed how it is planning to bring its public deficit below the 3% of GDP (gross domestic product) cut-off point in 2015, as promised to the European Union (see EUROPE 11063). The French stability programme is intended to reduce public spending by €50 billion by the end of the government's five-year term of office.
In the stability programme unveiled to the cabinet on Wednesday, the public deficit reduction bid will require further cuts of €4 billion in 2014. The government explains that the €4 billion will all come from savings in public expenditure, which come on top of the €18 billion (including €15 billion of savings) included in the country's budget for 2014 and to be explained in detail at a budget conference before the summer break.
Public deficit of 3.8% of GDP in 2014 and 3% in 2015. France is planning to reduce its public deficit to 3% of GDP in 2015, as promised to the European Commission. The public deficit is expected to stand at 3.8% of GDP in 2014. Along with the drive to reduce the public deficit (state, social security and local communities) by 1.3% of GDP by 2017, the government is aiming at a structural deficit (not including unpredictability of the economy) of 2.1% of GDP in 2014, 1.2% in 2015 and 0.3% in 2017.
The public debt will be stabilised at 95.6% of GDP in 2015 and will only start to fall from 2016 onwards, reaching 91.9% at the end of 2017.
The French government stability programme forecasts GDP to grow by 1% in 2014, 1.7% in 2015 and 2.25% in 2016 and 2017. Paris is placing great hopes in its “responsibility pact,” which it hopes will lead to the creation of 200,000 jobs to boost French growth by the end of the current government. The index used to calculate civil service pay rises will be frozen until 2017 under the stability programme adopted by the cabinet. (LC)