France’s Socialist government unveils its first budget today, and it is expected to be the toughest for 30 years.
France has managed to stave off full-blown austerity until now, but worsening public finances and growth slowing to a standstill in the last quarter means Paris has to slam the brakes on public spending to ease pressure on the euro and stay credible in the international money markets.
“Balancing the government budget is the first step towards improving the growth rate. Now it’s a big risk because it’s possible that, as they try to reduce government spending and return to a balanced budget, they have a negative impact on growth. If growth fails, deficits increase, and they won’t be able to balance the budget. So it’s clearly a risk that he is taking, but that’s the calculation,” says the Paris Institute for Political Studies’ Christopher Bickerton.
Coalition partners the Greens have said they will not vote for the budget in parliament, so it will pass with support from the right.
“I think the French government has actually relatively modest assumptions for the growth outlook in 2013, and I think against that background that France will hit the target of three percent next year,” says Daiwa Capital Markets’ Tobias Blattner.
Thirty billion euros of cuts are designed to get the deficit back to three percent of GDP by the end of next year. But it is all happening as France struggles with its highest unemployment in 13 years.
- 1euronews live TV - News | euronews : the latest international news as video on demand
- 2Greek debt crisis is “absolute supremacy of capital over humans”
- 3[Live updates] NGO flotilla bids to break Israeli blockade of Gaza
- 4[LIVE UPDATES] Greek debt deadline looms
- 5Large Hadron Collider ready to embark on an unprecedented voyage of discovery
- 6Istanbul Gay pride quashed by riot police, rubber bullets and water cannon
- 7[LIVE UPDATES] France: man decapitated, several wounded in chemical plant attack
- 8Israel prepares to repel boarders as ‘Freedom Flotilla 3’ tries to run Gaza blockade
- 9Greek debt summit – Live updates
- 10Seven reasons why Yanis Varoufakis is now a political legend
- 11‘Distractingly sexy’ scientists hit back in lab chemistry polemic
- 12Greece votes ‘No’ in overwhelming rejection of bailout proposals
- 13NewsWires : euronews : the latest international news as video on demand
- 14Greek debt: who will pay if Greece fails?
- 15Summit up in Brussels as Greek proposals give food for thought and rumours fly
- 16Battle of Waterloo, live-tweeting 200 years on
- 17Greek PM faces day of crucial bailout talks in Brussels
- 18Spain’s first case of diphtheria in 30 years: parents of six-year-old ‘oppose vaccines’
- 19Citizens take power in Spain’s largest cities as a political revolution sweeps the country
- 20Italy discovers biggest illegal waste dump in Europe
Latest world news
‘Last chance’ meeting for Greece as euro zone creditors gather
Tsakalotos reveals notes but no new proposals at Eurogroup
Greek people worry about their savings and their country’s future
Al Shabaab kills quarry workers in Kenya gun attack
Migrant dies in Channel Tunnel after jumping on UK-bound train
Wires > News
- 19:29 CET Six powers and Iran to continue nuclear talks past deadline
- 19:22 CET Sierra Leone urged to ban FGM after backing women’s rights treaty
- 19:21 CET ‘Real risk’ of famine in Yemen as death toll passes 3,000
- 19:09 CET Israel says Islamic State’s Sinai assault aimed to help Hamas get…
- 18:40 CET Suspect in Charleston church shooting indicted on 9 murder counts
- 17:15 CET Bomb kills dozens in north Nigeria, gunmen open fire on crowd
- 17:13 CET Pakistan kills leader of anti-Shi’ite militants in southwest
- 17:10 CET U.S. only training 60 Syrian fighters, far below expectations