Brussels, 15/04/2015 (Agence Europe) - On Wednesday 15 April, French finance minister Michel Sapin unveiled additional cuts in public spending that France will undertake to make an additional structural budget reduction (not including debt-servicing) of 0.5% of GDP by the end of the year.
Savings of €2.4 billion will be provided by the French state and its operators via a reduction in the public debt. Social security will provide a billion euros (a €400 million cut in the national sickness benefit spending and €600 million from benefits). A further €600 million is expected in additional income, including €400 million on assets hidden from the taxman overseas. The French government is not planning to require local authorities to make any additional savings.
The Ecofin Council attached strings to its authorisation of an extra two years (from 2015 to 2017) for France to bring its deficit back below the 3% of GDP cutoff point, requiring France to pledge to additional structural measures in 2015 to the tune of between €3 billion and €4 billion. Measures of a similar scale are also required for 2016 and 2017.
Sapin is quoted in French newspaper Le Monde as saying that France will bring its deficit back below 3% in 2017. Under the trajectory recommended by the French government, the public deficit will be around 3.3% of GDP in 2016 and 2.7% in 2017 (see EUROPE 11291). The Ecofin Council wants France to consolidate its public finances by reducing the deficit to 4% of GDP in 2015, 3.4% in 2016 and 2.8% in 2017. (Mathieu Bion)