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.
Copyright © 2014 euronewsMore about:
- 1South Korea ferry trial: students tell how they floated to safety
- 2#ن: How an Arabic letter was reclaimed to support Iraq’s persecuted Christians
- 3Blackout: Gaza’s only power plant destroyed by Israeli tank attack
- 4Israel warns of ‘long-lasting operation’ in Gaza as at least five Israeli soldiers killed
- 5Palestinian children killed by missile strike while at play in Gaza
- 1Fears over spread of Ebola as more tragedies emerge
- 2Muslims around the world get set to celebrate the ending of Ramadan
- 3Japan teenager arrested for beheading classmate
- 4#ن: How an Arabic letter was reclaimed to support Iraq’s persecuted Christians
- 5Russia opens humanitarian corridor for injured Ukrainian troops, Russian state TV claims
- 1#ن: How an Arabic letter was reclaimed to support Iraq’s persecuted Christians
- 2Air Algerie plane ‘crashes’ over Sahara
- 347 dead and 11 injured in TransAsia Airways crash landing
- 4TransAsia Airways plane crashes on landing in Taiwan, killing dozens
- 5Eastern Ukrainians ‘hate Russian-led guerrillas’ — Arseniy Yatsenyuk
Wires > News
- 18:42 CET Chinese police shoot dead dozens after attack in Xinjiang
- 18:25 CET Air France, Virgin among airlines avoiding Iraqi airspace
- 18:09 CET U.S. nuclear negotiator will not guarantee end to Iran extensions
- 17:31 CET U.S.-Iran nuclear negotiator ‘concerned’ about detention of…
- 16:22 CET Putin may have passed point of no-return over Ukraine
- 16:15 CET Suspect in Jewish Museum attack extradited to Belgium
- 15:46 CET Colombia’s Marxist ELN rebels to blame for explosions – police
- 15:38 CET Ex-Catalan chief Pujol stripped of titles in Spain tax scandal