PARIS (MNI) – France’s Prime Minister Francois Fillon on Thursday
urged the French Parliament to adopt a proposed law that would freeze
government spending in order to help bring the country’s public deficit
down to the EU-allowed minimum within three years.

“Now that we are exiting this crisis, we must of course apply
ourselves vigorously to the reduction of the deficit,” Fillon said in
response to a question from a lawmaker on the government’s economic
policy.

“We are going to do it by proposing to you a three-year law the
objective of which is to bring the deficit below [the EU maximum of] 3%
[of GDP] in 2013,” Fillon continued. “To get there, we will propose to
strictly freeze state expenditures; it is possible.”

He noted that the 2009 budget deficit, originally projected at 8%
of GDP, then revised down to 7.9%, finally came in at 7.5%. This, he
said, “shows that we’ve held the line on expenses.”

The Budget Ministry reported Thursday morning that France’s central
government deficit in the two months through the end of February was
E21.8 billion, a considerable improvement from the deficit of E32.6
billion posted in the same period a year earlier.

Fillon also noted that the competitivity gap between France and
Germany had widened in the past 15 years because while German
governments were busy implementing structural reforms, the French were
not doing the same.

This gap must be narrowed, he said, adding that his government’s
economic policies were aimed doing just that.

“We have chosen a common destiny, with a common currency. We must
accept all the consequences of that,” Fillon said. “We cannot let the
competitiveness gap between our two economies widen.”

Fillon noted that France was the first to exit the recession, “but
at the same time growth is extremely fragile.” He noted that the U.S.
economy, as well as those in the emerging countries, are coming back
strong. “If we want to catch this recovery train, we need to be careful
not to make any disorderly moves. So we will maintain the course of our
economic policy.”

–Paris newsroom, +331-42-71-55-40; bwolfson@marketnews.com

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